Trump's Mexico Tariff Means 'Wake Up Call Is Here' for Markets: Posen

The transcript discusses the economic implications of the China-US trade tensions, initially expected to be limited in the short term with minor inflation and GDP impacts. However, medium-term concerns include restricted technology flow and reduced productivity. The recent Mexico threat complicates matters, potentially leading to a market sell-off and a reevaluation of the likelihood of a China-US breakup.

What are the expected short-term economic impacts of the US-China trade tensions?

• Increase in unemployment

• Significant decrease in GDP

• Slight increase in inflation

• Major technological advancements

In the medium term, what is a major concern regarding US-China relations?

• Rise in employment rates

• Decrease in consumer spending

• Disruption in technology exchange

• Increase in global trade

How might US multinationals be affected by the trade tensions?

• Deprivation of skilled labor access

• Improved productivity growth

• Increased access to skilled labor

• Higher investment returns

What does the Mexico threat imply for US-China relations?

• Improved diplomatic relations

• Strengthening of trade agreements

• A turning point in market perceptions

• Decrease in market volatility

What is the likely market reaction to the perceived breakup with China?

• Decrease in inflation rates

• Increased market stability

• Start of a market sell-off

• Rise in stock prices