The World Health Organisation (WHO) hopes that ‘X’ does not lead to spots.  Last week WHO published an updated list of diseases which pose a serious outbreak threat, which saw a new disease added, dubbed Disease ‘X’.  This is a Donald Rumsfeld, ‘known unknown’ with WHO saying that ‘X’ represents the knowledge that a serious international epidemic could be caused by a pathogen currently unknown.

So, uncertainty is not just reserved for financial markets and politics.  This was demonstrated with the agreed meeting between Donald Trump and Kim Jong-un, which did not make anyone’s list of plausible probabilities for 2018.  What was arguably on the top of most people’s lists, was Donald Trump causing a fair degree of ambiguity in his policies, which coalesced in the form of trade tariffs for steel and aluminium imports.

The silver lining was that the White House adviser Gary Cohn would be organising a meeting between steel and aluminium consumers; he is the voice of reason on trade policy.  Unfortunately, he resigned the very next day, which was a blow to anti-protectionism and adds to the unusually high turnover of senior staff in Trump’s administration.  This undermines the policy continuity that markets crave.

We believe the economic impact may be fairly limited since steel and aluminium imports account for around 2% of all US imports.  The clear majority of imported metals come from Canada and Mexico, which have been given a temporary exemption.  So, whom is Trump looking to pick a fight with in the trade war?  If it is China, as many suspect, then it will have little effect.

China’s overall exports surged 44% in February, which along with a slight decline in import growth, pushed the country’s trade surplus to $33 billion for the month.  China has now brought itself in line with Germany, France and the UK by abolishing term limits for its head of Government.  This was not a surprise and for the short-term means stability, which markets may look upon favourably.  The flip-side is over the longer-term it may make innovation more challenging, which depends on interesting times to provoke improvements and changes.