There will be no trade war, but that does not mean that markets won’t continue to react to the threat. Anyone that has observed our president over the last year should realize that he is prone to grand or provocative statements and when it comes to those regarding trade he is in negotiation mood. President Trumps book, “The Art of the Deal” should be required reading by all investors. Trump believes that past deals can always be renegotiated into better current deals. Those that might be settled can be reopened. He is always dealing.
This certainly has caused more volatility for stocks, but the current upset over China is nothing to concern yourself. In the recent steel and aluminum tariff announcement when all countries exporting to US were going to be hit with a tariff, Canada and Mexico and others were excluded. At the same time NAFTA is being renegotiated with those two countries.
President Trump may stumble and even screw up at some point dealing with trade. However, being a business man, it is hard to see him doing any real damage and very possibly actually getting better deals for America. Of course, companies may not like it, as much of their earnings come from overseas but for investors volatility usually means opportunity.