A Word of British Caution
Now, before you rush off to remortgage the house and pile into American manufacturing stocks, a healthy dose of cynicism is required. Trade wars are messy, unpredictable beasts. For every action, there is usually an equal and opposite reaction. The European Union is not known for taking economic attacks lying down. Retaliatory tariffs on American exports could easily follow, hurting the very companies that stood to gain. Furthermore, what one administration builds with tariffs, the next can tear down with the stroke of a pen. An investment thesis built on the shifting sands of politics is a risky one indeed. Let's not forget that someone, ultimately, pays for these tariffs. That someone is the American consumer, and higher prices across the board could dampen economic activity, creating a rather hollow victory for domestic firms.