The trade war is back. Every time Trump threatens new tariffs, risk assets sell off hard. But here’s why we’re not too concerned: Tariff announcements usually cause short-term pain but eventually leads to gains. When the tariffs are announced, Trump doubles down on them which causes more pain for risk assets. Roughly a week after, Trump signals negotiations are underway and that a deal is being worked on. That’s when markets stage a relief rally often reclaiming most (or all) of the initial losses. Once markets stabilize, a trade deal is announced 2-4 weeks later which pushes risk assets to new all-time highs. This pattern has now been repeated multiple times.