Investors are closely watching the unfolding trade tensions, especially following China's retaliatory tariff moves after President Donald Trump's 10% tariff on Chinese goods. Proposed tariffs on Canada and Mexico are on pause due to temporary agreements, but larger concerns persist.
Doug Holtz-Eakin, president of the American Action Forum and former director of the Congressional Budget Office, joins Morning Brief to highlight the ongoing tariff risks — warning that this could be the beginning of a long-term trade war with China.
"This looks like a four-year engagement, as this is genuinely a trade war," Holtz-Eakin explains. "I don't think there's any pretense otherwise; China is responding with economic measures, investigations, export controls, tariffs on US goods."
He also raises concerns about inflation, which could remain elevated as a result of these protectionist measures.
"Certainly, inflation has been stickier than the Fed had hoped. It's been stalled for about the past six months in the same range, with no perceptible progress," Holtz-Eakin adds.
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This post was written by Josh Lynch