Trade tensions have been steadily escalating since the start of the year, culminating in the latest round of tariffs on $200bn of imports from China. The concern is that the situation could deteriorate further with China retaliation potentially opening the door to the Trump administration implementing tariffs on all Chinese imports. This is bad news for both growth and inflation. In terms of economic activity, there are negative implications for both sentiment and spending with supply chain disruption, higher costs and uncertainty on the economic implications risking a slowdown in both investment and labour hiring. ... (full story)