“Tariffs are working far better than anyone ever anticipated,” President Trump tweeted on August 4. “China market has dropped 27% in last 4 months.”T…
“Tariffs are working far better than anyone ever anticipated,” President Trump tweeted on August 4. “China market has dropped 27% in last 4 months.”
The president’s numbers are off—China’s stock market was down 14 percent over those four months (or 24 percent since its peak on January 24). More importantly, the assumption that this fall has spurred trade-talk progress is dubious.
But putting those quibbles aside, we question the president’s bigger premise: that the Chinese market is down because of his tariffs .
Here is why we question it.
Since both countries unveiled the product lists and roll-out dates for their first waves of tariffs on June 15, China’s CSI 300 index has fallen by 13 percent. The U. S. S&P 500 index, meanwhile, has risen 4 percent. This would, at first glance, appear to back the president’s view that tariffs are hitting China harder than the United States. Yet if we want to isolate the impact of tariffs, we need to do at least two things.
The first is to establish the parameters of the time period such that we are not capturing the impact of other trade-related factors.
