(New York)

For anyone who thinks a trade war might not hurt the US economy, or that one may be easy to win, this is an important story. Robert Shiller, famed economist, just said a trade war with China would cause quick and devastating damage to the US economy. “It’s just chaos … The immediate thing will be an economic crisis because these enterprises are built on long-term planning, they’ve developed a skilled workforce and ways of doing things”. Shiller says that even if tariffs don’t directly affect the economy, many companies will lose their confidence to plan and invest. “It’s exactly those ‘wait and see’ attitudes that cause a recession”, says Shiller.

FINSUM: So we imagine that a trade war would be very disruptive and would undermine the confidence of US companies as it would destabilize the ground on which industry has been built for the last 25+ years. However, the US has put itself at the raw end of trade deals for many years and claiming some ground back may be positive in the long-term.