Why Isn’t the Threat of a Massive Trade War not Affecting Markets?

www.bloomberg.com/view/articles/2018-07-16/what-game-theory-says-about-trump-s-trade-strategy

On the one hand, the escalating tit-for-tat tariffs still affect only a relatively small part of the two countries’ economies. The consensus baseline remains that the measures should not have a significant and lasting downward impact on the economy and stocks and, ultimately, may help bring about trade that is still free but fairer…

-An inherently cooperative game is increasingly played uncooperatively.
-Further escalation is the most likely outcome for now.
-The game is inherently unbalanced (towards the US).
-Public accusations and counter-accusations make trust difficult.
-You can get there faster through coalition-building.
-Implementation is trickier than design.

 

AC