Even without a recession, costs per unit of manufactured goods will increase if production contracts as tariffs ripple through the global supply chain. Then unit prices are likely to follow.

So “the consumer who just got laid off will have to pay more [for certain products],” Fuss says. “Let’s just say something like this is possible.”

That’s part of the reason why the Fed may be asking if it “really wants to raise rates” or shrink its balance sheet. The central bank also may be wondering how it will finance an increasingly heavy debt financing schedule going forward.

Taxes on repatriated corporate cash overseas have enabled the U.S. Treasury to take in more revenues than anticipated, Fuss notes. But that’s a one-time phenomenon likely to run out soon, so there will be more Treasurys to sell.

How will countries from China to Canada to Europe feel about buying our debt after we’ve antagonized them? If the trade war causes their economies to slow down, the reality is that they will have less funds to purchase Treasurys even if they want to buy the greenback.

Right now, Fuss says the demand for 30-year Treasurys is very strong, thanks to defined benefit plans seeking assets to match against pension liabilities. So-called 30-year long bonds are stripped, or divided into interest-only and principal-only hybrid securities, almost as quickly as they are issued. But pension plans also are declining in number and significance as more companies and government entities switch to defined contribution plans.

Fuss believes the Fed will stick to its plan and raise the Fed funds rates again in September. In this type of environment, investors could flock to 10-year Treasurys. Fed governors want to get interest rates higher so small banks can attract deposits and so they have ammunition to fight the next recession.

But after September, the outlook is not so clear. “How this all works out I don’t know,” he says. “But I don’t like the outlook.”

It’s always possible that America’s mercurial president could win a few concessions and declare victory. That’s what the stock market appears to be saying. America, Canada and Mexico account for only 7 percent of the world’s population and 29 percent of global GDP, so the North American economic free-trade zone is well worth protecting.

Unfortunately, the stand-off with China looks far more intractable and it‘s hard to imagine either side backing down. Grievances about China’s treatment of intellectual property are legitimate. On the surface, it would seem China has much more to lose than America.