As Wall Street's expectations grow dimmer for a quick resolution on President Donald Trump's tariff and trade disputes, the nest eggs of ordinary Americans hang in the balance.
Investors had been pinning their hopes on a potential meeting between the president and his Chinese counterpart Xi Jinping at this month's G-20 Summit in Japan that could break the impasse, but that optimism is dwindling. CNBC reported that analysts from both JPMorgan and Morgan Stanley expressed doubt that the two leaders would meet and agree to a trade deal.
In a new research note, analysts at Goldman Sachs estimated there is a 60 percent chance that the U.S. will levy a 10 percent tariff on the remaining $300 billion of Chinese imports, a 70 percent chance that Trump will follow through on his threat to slap a 5 percent tariff on all imports from Mexico, and a 40 percent chance that the White House will implement sweeping tariffs on imported cars.
"We still expect deals with China and Mexico to lead to a removal of the tariffs, but not until late 2019/2020," they wrote.
RELATED: Take a look at the products directly impacted by Trump's tariffs:
Products directly hit by Trump's tariffs on Chinese goods
Products directly hit by Trump's tariffs on Chinese goods
Meat: pork; beef intestine; rabbit meat; venison; frog legs
Fish and seafood:live fish including ornamental fish, trout, eels, tuna, and carp; chilled or frozen meat of various types of trout, salmon, halibut, plaice, sole, albacore, tuna, herring, mackerel, cobia, swordfish, pollack, whiting, catfish, rays, and more; various types of salted or smoked fish; other seafood including various types of lobsters, crabs, shrimps, prawns, oysters, scallops, mussels, clams, squid, octopus, conchs, abalone, sea cucumbers, and sea urchins.
Non-meat animal products such as eggs and dairy:Whey products; butter; various types of eggs including chicken; honey; hair of animals including human, hog, horse and badger; animal intestines, bladders; feathers; bones including shells, beaks, corals, hooves, antlers, and more.
Vegetables:onions; garlic; cauliflower and broccoli; cabbage; carrots; turnips; radishes; beats; cucumbers; peas of various types; beans; lentils; celery; mushrooms; peppers of various types; squash; okra; sweet corn; potatoes; sweet potatoes and yams; some types of tomatoes; spinach; Brussels sprouts.
Fruit and Nuts: Coconuts; cashews; almonds; hazelnuts; walnuts; chestnuts; pistachios; macadamia nuts; pecans; dates; figs; pineapples; guavas; oranges; mandarins; clementines; raisins; grapes; apples; pears; quinces; peaches; berries including strawberries, raspberries, cranberries, blueberries and others; bananas; a variety of dried fruits; peels of various fruits.
Cereals: wheat, including durum wheat; barley; oats; corn; various types of rice; grain sorghum; buckwheat; quinoa; and more.
Mill products: flours including those form wheat, corn, buckwheat, rice, rye, other cereals, potatoes, and bananas; groats and meal of various types including wheat, corn, oats, and rice; malt; starches of wheat, corn, potato, and more
Oil seeds: soybeans; seeds of sunflower, flax seed, sesame, mustard, poppy and more; planting seeds for certain crops; cocoas and mint leaves; and seaweeds.
Sugars and candies: cane sugar; candies with no cocoa
Breads and Pasta: uncooked pasta; various breads, pastries, cakes, and biscuits.
Prepared vegetables and fruits: various vegetables and fruits previously listen in their prepared or preserved forms; various fruit jams including strawberry, pineapple, apricot, and more; peanut butter; various fruit juices including orange, pineapple, lime, grape, apple, and more.
Other food items: soy sauce; condiments and seasonings; protein concentrates.
Beverages and vinegars: water, including mineral water; fruit or vegetable juices and juice mixes; beer from malt; wine, including rice wine; ethyl alcohol; vinegars
Food processing waste and animal feed: brans from processing; oil cakes; dog or cat food; animal feed
Tobacco products: various types and preparations of tobacco; tobacco refuse; cigars; cigarettes; smoking tobacco
Salts and minerals: salt/sodium chloride; sulfur; graphite; quartz; types of clays; chalk; slate; marble; granite; sandstone; dolomite; gypsum; some plasters; some types of cement; mica; Epsom salts
Ores, slag, and ash: ores of iron, copper, nickel, cobalt, aluminum, lead, zinc, tin, chromium, tungsten, uranium, titanium, silver, other precious metals, and others; slag, various types of ash.
Mineral fuels and oils: coal; lignite; peat; coke; tars; various types of light oil; various types of kerosene; petroleum oils; liquefied fuels including natural gas, propane, butane, ethylene, and petroleum; oil shale and tar sands
Inorganic Chemicals: chemicals such as chlorine, sulfur; carbon, nitrogen, oxygen, and silicon; acids including sulfuric, nitric, and more; various types of fluorides, chlorides, sulfates, nitrates, carbonates, and more.
Fertilizers: animal or vegetable fertilizers; urea; ammonium sulfate; sodium nitrate; and more.
Tanning and drying extracts, dyes, and paints
Essential oils, perfumes: perfume; lip or eye make up preparations; manicure or pedicure products; shampoo; hairspray; bath salts.
Soaps and cleaning products: various types of soap; leather and textile treatments; polishes for shoes and furniture.
Glues, adhesives, and enzymes
Cigarette lighter fluid
Photographic goods: various types of photo plates; instant film; various types of film in rolls; various types of motion picture film.
Various chemical products: pesticides; herbicides; fungicides
Plastics: vinyl flooring and other plastic floor and wall coverings; sausage casings; bags; gloves including baseball gloves; rain jackets; machinery belts.
Rubber: latex; rods, tubes, and other products; conveyor belts; various types of transmission belts; various types of pneumatic tires; gloves; gaskets; dock fenders.
Raw hides and leather: animal skins including cow, buffalo, sheep, goats, reptile; various types of leather made from cow, buffalo, sheep, goats, reptile; leather trunks and suitcases; leather handbags; CD cases; gloves including ski, ice hockey, and typical use; belts; fur clothing, incluidng artificial fur.
Wood: fuel wood; charcoal; various types of wood including oak, beech, maple, ash and cherry; moldings; rods; particleboard; various types of plywood; doors; corks and stoppers; wicker and bamboo baskets.
Other textile products, rope, twine: hammocks; fish nets; carpets;
Fabrics: corduroy; gauze; terry towel; lace; badges; embroidery
Headgear: caps; hairnets; wool hats; head bands
Stone, plaster, cement, asbestos: stone for art; marble slabs; roofing slate; millstones; sandpaper; floor or wall tiles; cement bricks.
Ceramics: fire bricks; pipes; tiles; porcelain and china.
Glass and glassware: balls; rods; drawn or blown glass; float glass; tempered safety glass; mirrors; carboys, bottles, jars, pots, flasks, and other containers; microscope slides; woven fiberglass
Precious stones and pearls: industrial diamonds; silver and products made of silver; gold and products made of gold; platinum; palladium.
Iron and steel and products derived from the metals:drums; tubes; pipes; doors; windows; screws; horseshoes;
Copper: plates; cables; tubes; pipes; springs
Nickel: bars; rods; wires
Aluminum:powder; cable; wire; screws.
Various metal products, tools, cutlery: industrial items made from lead, zinc, tin, and more; saw blades; bolt cutters; hammers; wrenches; crow bars.
Machinery, both industrial and retail: steam turbines; engines; fuel-injection pumps; air compressors; air conditioning machines; refrigerators; cream separators; hydraulic jacks; escalators; manure spreaders; copiers; automatic beverage-vending machines
Electronics: vacuum cleaners; hair clippers; spark plugs; generators; bicycle lights; electric amps; television cameras; various types of TVs; video projectors.
Vehicles and parts: axles; driving shafts; gear boxes; radiators.
Ships and boats: sailboats; motorboats; canoes; yachts.
Instruments for scientific or medical purposes: microscopes; cameras for non-art purposes; gauges for pressure, electrical currents, and more.
Clocks and watches
Furniture, bedding, mattresses: car seats; wood chairs; furniture designed for offices, kitchens, and more; mattresses; chandeliers; lamps.
Assorted items: buttons; stamps; paintings; collections of zoological, botanical, mineralogical, anatomical, historical, archaeological interest; antiques of an age exceeding one hundred years
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BACK TO SLIDE
But that might be too late for the U.S. economy, market observers warned. "It's going to continue to weigh on markets," said Mitchell Goldberg, president of ClientFirst Strategy. "The longer it goes on, the worse it gets."
A reversal in the market's gains could be a sharp wake-up call for investors lulled into complacency by a historically long-running bull market. "The tariffs will hasten a nasty retreat in stock prices," Goldberg predicted.
"They're not positive. They're going to cause friction. They're going to raise costs for consumers, they're going to raise costs for businesses," said Sameer Samana, senior global market strategist for the Wells Fargo Investment Institute.
Wall Street and corporate America alike were caught by surprise at Trump's sudden threat to disregard his administration's new version of NAFTA with his Mexico tariff tweets last week. "That was just completely out of the blue," Samana said.
"He's clearly trying to please his base by turning tariffs into a social cause and it's completely open-ended," Goldberg said, which only magnifies the uncertainty faced by businesses. "What else could he do?"
Although the U.S. has an advantage in its relatively greater leverage over Mexico, tariffs on all imports would cut to the heart of an economic linchpin for the U.S. "The auto supply chain involves so many jobs in America, you could reverse the job gains very quickly if you mess with that," said Jamie Cox, managing partner at Harris Financial Group.
The prospect that China could resort to non-tariff retaliatory tactics such as restricting access to its enormous domestic market also weighs on investors. "If trade and tariffs start to spill over into something more negative for global growth, as in this tariff issue isn't resolved until sometime in 2020, it opens the door for more down side," Samana said. "If China as a market is shut off for large U.S. corporations — that was their growth engine for the past five years."
The puzzle for anxious investors is figuring out how, and when, these negative effects will hit their portfolios. Market observers say that the tech sector, small-cap and emerging market stocks are especially vulnerable, but this situation is so unprecedented that there isn't a reliable, agreed-upon model for predicting where the chips will fall.
"For most individual investors, it's very difficult to figure out how and when these things will matter," Samana said. Anyone with retirement savings invested in the stock market needs to take a look at their asset allocation and evaluate their time horizon and stomach for risk. Investors, Samana said, need to "make sure they're not leaning out over their skis in stocks."
"When markets do really well, take some chips off the table," he said. "It's an okay time to be cautious. People have enjoyed a lot of gains over the last 10 years."
Assuming that the past decade's worth of market growth will continue indefinitely is foolhardy, Goldberg said. "That doesn't really mean you can extrapolate that going forward."
Goldberg said people should take a look at their asset allocations and consider if they are too exposed to stocks, given the current down side risk. "People are starting to take that into consideration because they're hearing about the tariffs, but… they really need to get to it sooner than later," he said.
Investors also shouldn't assume that the quick rebound from last December's free fall will be repeated if stocks face more fundamental growth challenges.
Cox said that the algorithms that drive much of trading activity today can make a spate of volatility seem worse than fundamentals would dictate. "We live in a world now where technical trading drives the markets in directions," he said. Like the old saying about a frog in a pot of water that gets hotter slowly, investors should be more wary of sustained slides than sudden drops.
"People need to remember that normally when markets fall quickly, they recover quickly. It's when they step down over time that it takes longer to recover," Cox said.
A capital gain occurs when you sell something for more than you spent to acquire it. This happens a lot with investments, but it also applies to personal property, such as a car. Every taxpayer should understand these basic facts about capital gains taxes.