This is when trade war threats might boost the dollar

After fielding client meetings split between whether trade wars will be bullish or negative for the dollar, Societe Generale said there’s likely only one scenario where the greenback will get a boost.

“Trade wars in isolation are probably only positive for the dollar at the point where it hurts actual growth or future expectations thereof,” it said in a note earlier this week.

It said the “logical” currencies to be hurt most in that scenario are those with very open economies, based on exports to gross domestic product (GDP), and in the “crosshairs” of U.S. trade threats either directly or indirectly through the supply chain and through second-round effects on global economic growth.

The biggest impact will likely not be based on country, with little differentiation likely in emerging market currency performance, it said.

But it added, U.S.-initiated trade wars are most likely to be dollar negative or neutral for the most part.

When the U.S. threatened tariffs on Japanese auto imports in 1994-1996 and when U.S. President George W. Bush implemented steel tariffs in 2002-2004, the U.S. dollar actually fell, Societe Generale said.