As I write this, China’s announcement of a new round of tit-for-tat tariffs has stoked fears of trade war and sent stock futures plunging. If this morning’s futures hold, the S&P 500 will be about 10.5 percent off its January peak, around 6 percent off its level when Gary Cohn, the last of the Trump “globalists,” was pushed out.

My question is, why such a large fall?

One good answer is, that’s a stupid question. The three rules you need to bear in mind when discussing the stock market are (1) the stock market is not the economy (2) the stock market is not the economy (3) the stock market is not the economy. And stocks move for all sorts of reasons, or no visible reason at all. As Paul Samuelson famously quipped, the market has forecast nine of the last five recessions.

Another answer is that the trade war is a signal: Trump, Navarro et al are showing that they really are as unhinged and irresponsible as they seem, and markets are taking notice. Imagine how these people would handle a financial crisis.

Still, I think it’s worth noting that even if we are headed for a full-scale trade war, conventional estimates of the costs of such a war don’t come anywhere near to 10 percent of GDP, or even 6 percent. In fact, it’s one of the dirty little secrets of international economics that standard estimates of the cost of protectionism, while not trivial, aren’t usually earthshaking either.