Rabobank’s Senior Asia-Pacific Strategist, Michael Every writes about why we stand on the edge of a potential global trade war, which many see as irrational.
Financial markets are not pricing for it partly because the irrationality seems to reduce the probability of this outcome. However, there are multiple interpretations of what ‘rational’ means for all actors involved. One can make the argument the US and China are both acting rationally, while assumptions that our global system is rational may themselves be irrational! On that basis, the risks of trade wars may be higher than markets currently suggest. Go to here to read the article.