“Those tariffs must be having some effect.”
Oh yes. Quite simply, they can force the outcome.
On December 15th, if the next round of tariffs are imposed as scheduled, 2020 should be significantly worse for the ChiComs than 2019. 2019 was their worst year in over 50, and they have been flat out lying with their statistics (as they always do).
The next round drops 15% tariffs on consumer electronics (laptops, cellphones, cameras, toys) - in between a stern warning shot, and enough to force everyone out. Like the previous tariffs, these will likely rise to 25% or 30% in another quarter or two, which will force almost everyone out.
So the threat (business expectation) is very credible - by now conventional wisdom. Businesses have to relocate out of China, if they want to sell in the USA.
More than the earlier rounds, this next one carries a greater secondary effect in China, because there is a big Chinese supply chain behind the companies that produce those products, and they will go down with them. Also, that industry is concentrated around ShenZhen in GuangDong Province, so that area will likely suffer quick drops in employment and occupancy rates.
Businesses from the last round of tariffs are still in the process of getting out, so that effect will be continuing as well.
We could see some wheels come off the Chinese economy and financial system in 2020. If this next round drops on 15 December, the die will be cast in earnest.
Get your popcorn ready to watch!
I don’t expect Trump to put the full Dec 15 tariffs on, but some.
China demands tariff relief for a deal: fine, Trump will take off some of the new tariffs.
So far, tariffs have not affected US consumers. But the next bunch will.
Trump has [played the perfect answer to China’s negotiations.