Are More US-China Tariffs Ahead?

Ken Fisher examines the likelihood and potential impact of renewed US-China tariff conflicts under President Trump's administration. He begins by setting the context of current 10% tariffs for 150 days and Trump's expressed hostility toward China as America's major economic rival. Fisher then draws on lessons from Trump's April 2025 'reciprocal tariffs' introduced on Liberation Day, which shocked markets with their magnitude and scope, causing significant initial market declines. However, the market quickly recovered as investors realized the tariffs' impact would be limited due to various workarounds. Fisher provides concrete evidence that the 2025 tariff implementation was largely ineffective, with actual revenue collection reaching only about one-third of original projections. He attributes this to numerous legal avoidances including importing through Mexico or Canada, minimal enforcement (fewer than 500 physical examinations out of millions of imports), and China's strategy of routing exports through other Asian countries for repackaging before shipping to America at lower tariff rates. Fisher concludes that any future tariff war with China will have minimal market impact because businesses and countries have learned to game the system effectively, and the market has become accustomed to these dynamics. He predicts that while initial volatility may occur, stocks would adjust quickly, unlike other potential market disruptions such as escalation in the Iran conflict.