Financial markets have experienced another bout of volatility, this time related to an escalation in protectionism involving the US and China.
All this comes in the context of globalisation – the increasingly free movement of goods, services, labour and capital – having been a key driver of increased prosperity around the world. However, not all have benefited from this process and some governments, notably that of the US, have started to address trade imbalances as a way to support their dissatisfied electorates.
An escalation of such tensions towards a full-blown trade war would be very damaging for global growth and certainly for global financial markets.
