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Are investors so focused on Dow 20,000 that they've become complacent about the true risks of Donald Trump's vows to tear up trade agreements, erect 17 commercial tariffs, and deport millions of immigrants?

So far, markets have focused on the purportedly bullish portion of his broad-brush economic proposals—corporate tax cuts and loose plans for infrastructure spending. But they have largely neglected Trump's potentially devastating approach to trade, one which scholars at the Peterson Institute for International Economics found could lead to a damaging, protracted trade war.

The September report identified specific industries and localities that would be most deeply affected by a trade war with major US trading partners. And it's not a pretty picture.

Source: PIIE Briefing 16-6: Assessing Trade Agendas in the US Presidential Campaign

"Millions of American jobs that appear unconnected to international trade—disproportionately lower-skilled and lower-wage jobs—would be at risk," according to the PIIE study.

But Wall Street's base case has been to dismiss the prospect of follow-through.

That negligence received something of a reality check over the holidays. A string of appointments, in particular those of anti-China economist Peter Navarro and steel-magnate-turned-protectionist-billionaire Wilbur Ross, confirms that, in keeping with some of his more outrageous campaign stunts (think pre-debate 'presser' with ex-Bill Clinton accusers), the president-elect may actually follow through on a lot of what he said he would do during the campaign.

That could include everything from erecting new tariffs, almost universally derided by economic experts as potentially hurting America's own firms, to starting trade wars with Mexico and China. It also means taking potentially drastic measures on immigration that could be deeply hurtful not only to the economy but to the American identity and social fabric, including potential increasing profiling of poor migrants by police.

Relations with Mexico have already come under strain even before Trump takes office because the peso has taken a severe hit in the wake of the surprise Republican victory, forcing the central bank to tighten monetary policy.