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Uncertainty got the upper hand this week. President Trump removed one certainty from the outlook — the U.S. economy would be wrecked by his de facto embargo of China — but we now are uncertain as to how bad a 30% Chinese tariff will be, and we also do not know what happens when the 90-day grace period is up.

Meanwhile, the White House has indicated that it will start unilaterally imposing tariff rates within a week. Since Trump appears to get great satisfaction from changing tariff rates, and there is no sign that any country other than the U.K. is interested in his “deals,” he might as well go back to governing via posting tariff rate changes on social media.

I was probably too pessimistic about the U.S. outlook, but the rapidity of Trump folding may allow a lot of firms to wiggle out of existing orders that were trapped in China during the grace period.

Nevertheless, logistics are going to be snarled, and uncertainty about American policy remains at the forefront. Nobody other than autocratic governments is going to want to deal with the policy uncertainty, and other developed countries will continue their strategy of decoupling from exposure to America.

If we assume that the damage from the logistics snarl will be contained, we should expect the delayed effects of tariffs to work their way into the hard data. Walmart recently warned that some prices would need to rise, and that should be expected to continue.

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