US-China Trade War Begins — March 2018
Tariff escalation and the Q4 2018 sell-off
Trump imposed 25% tariffs on steel and 10% on aluminum, then escalated with tariffs on $50 billion of Chinese imports. The S&P 500 peaked September 20 and fell approximately 20% intraday by Christmas Eve. A 'Phase One' deal was signed January 15, 2020.
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
The Fed was hiking to 2.25-2.50% and global PMIs were deteriorating. Trade-war uncertainty was a meaningful contributor but not the sole cause.
The March tariff announcement barely moved markets. Each retaliatory round gradually eroded earnings visibility.
From the Christmas Eve low, the S&P 500 rallied approximately 25% by April 2019.
Trade wars damage portfolios by increments — each retaliation round eroded earnings visibility in 2018, and the drawdown compounded with Fed tightening. Rather than trading the announcements, consider reviewing which holdings carry tariff-exposed cost structures or China revenue, since that is where escalation genuinely lands.