Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios Pro Rata

Dive into the world of dealmakers across VC, PE and M&A with Axios Pro Rata. Delivered daily to your inbox by Dan Primack and Kia Kokalitcheva.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Nashville news?

Get a daily digest of the most important stories affecting your hometown with the Axios Nashville newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Columbus news?

Get a daily digest of the most important stories affecting your hometown with the Axios Columbus newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Dallas news?

Get a daily digest of the most important stories affecting your hometown with the Axios Dallas newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Austin news?

Get a daily digest of the most important stories affecting your hometown with the Axios Austin newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Atlanta news?

Get a daily digest of the most important stories affecting your hometown with the Axios Atlanta newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Philadelphia news?

Get a daily digest of the most important stories affecting your hometown with the Axios Philadelphia newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Chicago news?

Get a daily digest of the most important stories affecting your hometown with the Axios Chicago newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top DC news?

Get a daily digest of the most important stories affecting your hometown with the Axios DC newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Sarah Grillo/Axios

Unless there's a breakthrough in the trade talks before midnight tonight, U.S. tariffs on $200 billion in Chinese imports are about to rise from 10% to 25% — an escalation of the trade war that could hurt major importers and trigger even more painful retaliation by China.

Why it matters: A larger trade war would be sure to hurt China, economists say — but it's also likely to backfire on the U.S. and global economy in a way that President Trump hasn't acknowledged.

  • “The first order of magnitude is that everybody’s going to be worse off," said Federico Kaune, head of emerging markets fixed income at UBS Global Asset Management. "There is no way around it. Protectionism… is bad for everybody. It’s a welfare deteriorating proposition.”
  • Business groups are sounding the alarms: “We are hopeful that there can be a meaningful deal reached with China soon, but we worry a failure in negotiations will result in shooting ourselves in the foot by imposing big new taxes on Americans,” said David French of the National Retail Federation.

Here's what Axios editors and reporters will be watching if this drags on.

The consumer impact: The big and obvious concern is how (or if) this will trickle down to the consumer, Axios' Courtenay Brown writes. 

  • The previously taxed items that will see 25% tariffs will directly impact some consumer goods — baseball/softball gloves and handbags, for example.
  • But the impact would be even greater if Trump followed through on the other threat he tweeted: to put tariffs on basically everything else we import from China, which would hit products that have largely remained untouched, like clothing and footwear. 
  • The Trump administration has mostly stayed away from putting tariffs directly on items you buy from say Walmart shelves. Right now, what's facing 25% tariffs are largely intermediary products — i.e. the things that are used to make the final products. (There's a good breakdown of those sectors here.)

On the U.S. side, the big question will be whether Trump continues to give carveouts for products like the iPhone, as he did when he first began announcing tariffs last year, Axios' Dion Rabouin writes.

  • On the Chinese side, we saw their plan as well: They'll target U.S. industries with political importance. Ahead of the midterms it was Harley Davidson motorcycles, whiskey, cranberries, soybeans and pork, which hit — among other places — the home states of Senate Majority Leader Mitch McConnell and then-House Speaker Paul Ryan.
  • Expect tariffs this round to be just as targeted, and for the Chinese government to start taking aim at U.S. businesses that operate in China with home bases in important swing states.

The auto industry: The outcome of the trade talks will no doubt influence Trump’s decision on whether to slap new 25% tariffs on all imported vehicles and auto parts, which would be in addition to the tariff hikes scheduled for Friday, Axios' Joann Muller reports.

  • New tariffs would hurt auto suppliers, car dealers and U.S. factories that depend on global supply chains.
  • The average price of a vehicle would go up $2,750 ($3,700 for imported cars and $1,900 for domestically built cars), according to the non-profit Center for Automotive Research in Ann Arbor, Mich.

The oil and gas industry: Oil and gas are remain indirectly caught up in the trade spat with China because the energy-hungry country is ratcheting down its imports of American oil and liquefied natural gas (LNG), a key part of Trump's energy agenda, Axios' Amy Harder reports.

  • Specifically, financing deals for LNG exports between the two nations could be undermined, per Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia University. 

The tech industry: If China wants to play hardball, it could quickly create plenty of chaos in tech. But the industry is betting that China wouldn't want to harm its own tech-fueled prosperity, Axios' Scott Rosenberg reports.

  • The hardware side of U.S. tech is joined at the hip to China, which is where the lion's share of our devices are manufactured today (and where much of the output of the U.S. chip industry is sold).
  • The tariff battle's biggest impact to date has been to compel many companies to rethink their supply-chain strategies and begin drawing up alternative options should the war grow hotter.

Keep in mind: The economy is so complex and interdependent that the second-, third-, and fourth-order effects are effectively unforeseeable, Axios' Felix Salmon writes.

  • The first-order effects of President Trump's tariff hikes will be felt by any U.S. companies importing goods from China, since they’re going to have to pay the tariffs.
  • Second-order effects would include things like U.S. companies passing increased costs on to U.S. consumers, as well as retaliatory tariffs from China on U.S. goods.
  • Third-order effects might include U.S. companies relocating operations to Vietnam and other Asian countries if they think these tariffs are going to be here to stay. But at this point we’re in the realm of speculation. 

Go deeper: The winners and losers (mostly losers) in a U.S.-China trade war

Go deeper

Mike Allen, author of AM
38 mins ago - Politics & Policy

First look: Anita Dunn advises Dems on economy message for '22

Signs from a President Biden event yesterday in Kansas City, Mo. Photo: Chase Castor/Bloomberg via Getty Images

In a midterm preview, top Democratic strategist Anita Dunn advises the party's House and Senate members to frame Republicans "as being against the economic interests of working Americans."

What she's saying: "Explicitly framing Republicans as opposing policies to lower costs does better than simply framing Republicans as the 'party of no,'" Dunn, White House senior adviser until August, writes in the memo.

JPMorgan: "Full global recovery" in 2022

Photo: Erik McGregor/LightRocket via Getty Images

JPMorgan Chase Global Research says in a forecast to clients: "2022 will be the year of a full global recovery, an end of the global pandemic, and a return to normal conditions we had prior to the COVID-19 outbreak."

The big picture: The bullish report sees "a return of global mobility, and a release of pent-up demand from consumers (e.g. travel, services)."

Inside Trump's hunt for "disloyal" Republicans

Illustration: Aïda Amer/Axios

Donald Trump and his associates are systematically reshaping the Republican Party, working to install hand-picked loyalists across federal and state governments and destroy those he feels have been disloyal, sources close to the former president tell Axios.

Why it matters: If most or all of Trump’s candidates win, he will go into the 2024 election cycle with far more people willing to do his bidding who run the elections in key states.