Capital Markets: Winter 2019
A Powerful Trend Fundamentals
• There have been various periods in history marked by fears of “trade wars” but ultimately countries have acted rationally and reduced trade barriers • While there may be more pain to come, we believe the powerful trend toward lower tariffs and more trade will prevail
• In the meantime, opportunities will likely arise for active management
U.S. Tariff Rates
U.S. Gross International Trade % of GDP
8%
35%
30%
Japanese auto quotas imposed
6%
25%
20%
4%
Bush steel tariffs
15%
10%
2%
Chicken Tax / European trade dispute
5%
Time magazine cover on “Trade Wars”
0%
0%
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
Source: U.S. International Trade Commission, U.S. Bureau of Economic Analysis, and Alger. Tariffs are calculated as duties collected divided by total imports.
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