The PresidenT and the Commerce Secretary have been making public statements the last couple of days, that seem to be geared toward preparing the markets for no deal with China during the current negotiations, and the next scheduled package of new tariffs going into effect on 15 December.
That would be 15% on $112 billion per year of goods - mostly finished consumer goods, especially cellphone, laptops, cameras and toys. That package of tariffs will be a focused hit on the Shenzhen area of China, their “Silicon Valley”. The whole integrated supply chain for those products in that area would be rocked by a contraction, and an exodus of companies to lower cost countries.
On 15 December, new orders will have no effect on our Christmas shopping, so it would be a very convenient time for us to impose higher tariffs on such goods ( as the Commerce Secretary pointed out).
The serious tariffs have been rolling out on pretty clear quarterly pattern. Letting the package already prepared and scheduled for 15 December go into effect, would be right in line with this trend.
I expect that pattern to continue, until 25-30% tariffs are in place on all communist Chinese imports, early next year. The chance of a serious economic or financial crisis occurring in China would go way up.
But it’s not just a “trade war”
China will strike back with NK and the Mideast or wherever it can.