The world has already lived through two rounds of US tariff increases and Chinese retaliation. But this weekend's tariff rates, along with another round that has been delayed until December 15, are different than those that came before, according to Aditya Bhave, world economist at Bank of America Merrill Lynch.
"For previous rounds of tariffs, it was clearly an attempt to stay away from consumer goods," Bhave said. "Now they run out of non-consumer goods."
JPMorgan Chase has predicted that US tariffs imposed on China have already cost the average US household $ 600 a year This will rise to $ 1
The December portion is particularly risky, Bhave points out, because, unlike previous rounds, there are few alternative countries that US companies can import the products in question. China accounts for more than 80% of US imports of these goods.
What it means: Companies will not ke could shield customers by switching supplier. Instead, they will likely need to pass on the extra costs.
See also: These tariffs will also hit China hard, Bhave said. "They have a pretty high capacity to take pain, but that doesn't mean they don't hurt," he said. Keep track of the manufacturing sector, private investment and consumer confidence – as well as any announcements of fresh public spending.
Brexit is about to even rotate
UK lawmakers are coming back from the summer holidays, which means the Brexit fight is about to become a notch. Look for more volatility in the pound ahead.
Prime Minister Boris Johnson gave a shock last week when He asked the Queen to suspend Parliament for about five weeks – the longest suspension in decades – just like the October 31 Brexit deadline looms.
Now, just a few days before the suspension, lawmakers have introduced legislation that would prevent a messy exit from the EU without an agreement to protect trade. They will try to do it this week.
A legal challenge to Johnson's maneuver will also continue this week in Scotland. A former British prime minister has joined a separate lawsuit to stop the move.
Meanwhile, Brexit dealers are continuing discussions with their European counterparts. Downing Street has said they will meet at least twice a week in September.
Remember: A disorderly Brexit poses great risks to the UK economy and its trading partners. Germany, which is on the brink of recession, follows developments closely.
US economy gets a reality check for the third quarter
Now a broadcast from my CNN Business colleague Anneken Tappe in New York is on a big week with US economic indicators:
"Concerns for the future of the US economy reappeared in August when the inversion of the Treasury yield curve flashed a recession warning.
Monday: China's Caixin Manufacturing PMI
Tuesday: US ISM Manufacturing Index; UK Parliament returns
Wednesday: US trade balance; Australia Q2 GDP; Canada interest rate decision; American Eagle and Slack earnings
Thursday: US ISM Non-Manufacturing Index; CrowdStrike and Lululemon revenue
Friday: United States Labor Report from August