Possible scenario
Open Trade Escalation
20% Chance
The talks break down and both sides move from threats to formal enforcement. This is less likely than managed retaliation because the EU and China both have strong incentives to avoid a broad industrial trade shock, but the EV tariff history makes escalation credible.
Initial impacts
- Market volatility Up
- Riskier companies' borrowing costs Up
- Copper Down
Secondary impacts
- Consumer Cyclicals -2.7%
- Consumer Non-Cyclicals -0.8%
- Industrials -0.4%
Portfolio impact
S&P 500-0.6%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
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