Possible scenario
Trade War Escalates
−2.0%
The administration’s refusal to pivot could convince major trading partners that concessions are unlikely, prompting retaliatory tariffs or formal WTO and subsidy actions. This is lower probability than gridlock but carries the largest near-term market downside.
What it moves
- Industrials−2.5%
- Consumer Cyclicals−2.2%
- Riskier companies' borrowing costs
- Market volatility
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