You would be forgiven for not immediately noticing the economic impact of Trump's burgeoning trade war with China. The stock market dipped on Wednesday, but it hasn't nosedived. The monthly employment numbers announced last week were solid. More Americans than ever are quitting their jobs to seek new ones, a sign of a strong labor market. The economy's strength may be why the Trump administration feels comfortable being so aggressive—any negative hits will just be absorbed by an economy running hot.
This is not a full-fledged trade war (yet), as the numbers involved thus far are relatively low. For example, the tariffs that took effect last Friday—a 25 percent tax on $34 billion in Chinese goods—amount to just $8.5 billion in annual tax increases on those imports, or less than one-two thousandth of the total U.S. economy.
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