Any company involved with China will likely see their bottom lines decrease for the near… thus, stocks for these companies are most likely to suffer. But, the good news as I see it, that will not affect the overall strength of our economy particularly if manufacturing and production is able to keep up the increases.
At some point, those companies doing business with China will see their costs to present goods to market increase and will seek alternatives… some already have. Sites in countries like Thailand, Vietnam, Korea, etc. are likely to be offered manufacturing opportunities and will be more pliable than the Chinese in how they approach the agreements.
There must be some short term pains in the attempt to rectify the long term trade practices of China has they have been allowed to manipulate the terms and playing field for decades unfettered. We saw the short term gain at the start of this when cheap manufacturing from China provided “cheaper” goods for the US consumer but the long term costs were steep. Losing a world power manufacturing and production model in lieu of cheaper prices has proven to be a disaster for the US economy.
At the end of the day, I strongly feel the US economy has the upper hand based on purchasing power… we are the main source of distribution for these more cheaply produced goods. Without our purchasing power, China will be forced to slash prices, accept little if any profit, and move those goods to anywhere they can sell them.
An agreement is there to be made and will be a huge deal when and if it is inked. I do not expect it before the 2020 election as for certain, at this point, the Chinese are trying to wait out Trump and see if they can deal with a President they can manipulate enough to end the effort for getting China to play the game fairly.
If Trump wins the 2020 election, I would not be surprised if China is not at the table deciding what they can live with… and I would expect this to happen shortly after the election.
Simply my predictions and these are based on observations, a simple understanding of negotiating psychology and those combined with the results of how I see these factors coalescing when all the dust settles. Reasonable minds could certainly produce enough rational alternative scenarios, but I will stick with these until such reality proves them incorrect.