Martin Wolf

If he just put up an average tariff of 40% or 35%, a lot of trade would disappear, but that's not what he did.

He ended up with imposing very high tariffs on some origins.

China still has very high tariffs, but the trade diversion has been phenomenal.

Trade goes through Vietnam, it goes through Mexico.

And the IMF had a very nice chart on that in the latest World Economic Outlook, which basically showed that, yes, direct trade between the US and China has shrunk, direct trade between the US and Canada has shrunk, but other people are taking its place.

And in some sense, it was designed to be porous.

Then there are all sorts of exceptions that he's negotiated in return for who knows what with sundry companies like Apple.

Apple would have been very badly hit.

So it's all very porous and it's all negotiable.

So it's not as serious as all that.

And then the shock in the Gulf is significant.

But oil isn't as important as it used to be, as we discussed.

The energy system has changed across much of the world.

And this will be accelerated, of course, but that's for the future.

And prices have gone up.

There will be a slowdown.

I'm absolutely sure that we might get close, really bad, really bad.

Maybe the world economy grows at 1%, 1.5%.

But it's not a catastrophe.

And finally, profits are robust because let's face it, worldwide, labor is weak.