Empirical Research has provided some insight on potential tariff effects. Key points:
1) Manufacturing matters more to the markets than to GDP. 40% of S&P 500 earnings versus 12% of GDP.
2) Most exports to China are agricultural products and commodities, which are not as costly to source elsewhere.
3) High-tech imports from China are roughly half of all imports. A third of imports from China are consumer goods.
Portfolio Strategy – U.S. – China Trade War, Margins and Tax Havens, Restructurings – Jun 20 2018