Tariff fatigue? Don't be silly! This economic bomb on August 1st is enough to wake up those who are pretending to be asleep!

Another week, another "tariff deadline" that seems to have been chewed up by the market. August 1st, Friday. Unless a miracle occurs—such as a new trade agreement being reached or the deadline being forcibly extended—the heavy hand of U.S. tariffs will come crashing down on core trading partners like the EU, Canada, and Mexico. There is a strange numbness in the air on Wall Street: "Tariffs? Old news!", "Deadlines come and go, and the sky hasn’t fallen yet." This pervasive sense of weariness has almost become a consensus, a dangerous form of self-hypnosis.

Ridiculous! This collective act of pretending to be asleep is simply absurd!

When the entire market is drowsy, thinking that the tariff issue has become a "dead dog" and cannot stir up any waves, Morgan Stanley's warning is like a bucket of cold water: Wake up! The eye of the storm is forming, and its destructive power far exceeds your numb imagination! The truly lethal shockwave is just beginning to brew.

This time, it's truly different! Take a look at the targets this time - the EU, Canada, and Mexico. These are not insignificant players; together, they account for nearly half of U.S. imports! Just imagine, a mere additional 5% tariff on these three giants could fiercely bite into the U.S. GDP, with an impact potentially twice as severe as similar measures on smaller economies! This is far from just scratching the surface; it's like stabbing directly into the heart of the economy! Those who thought the data could still "hold steady" should completely shatter that illusion - the most painful transmission often quietly occurs only after the storm.

Tearing apart the "three faces" of the American economy: which one will grin after August 1?
"Stagflation" Ghost (40% probability): The most likely nightmare scenario! Growth continues to bleed, while inflation stubbornly persists like a bone-deep infection. Don't expect any glamorous recession; this is the torment of a dull knife cutting flesh. The suffocating effect of trade shackles and high immigration walls will brutally crush any meager stimulus brought about by regulatory relaxation and fiscal pumping. A stagnant quagmire with soaring prices is beckoning.

False Dawn (20% probability): Animal Spirits "Return of Light"? Unless the trade war monster suddenly softens, the immigration doors creak open again, or fiscal stimulus can really turn stone into gold, igniting the legendary "animal spirits." But the reality is, just look at the combative demeanor of the White House; the likelihood of such a scenario is extremely slim! A slight tailwind cannot change the overwhelming current.

Recession Express (40% probability): Tariffs are that final push on the gas pedal! Don’t underestimate the destructive power of that decisive hammer blow on August 1st! The existing tariff rates have already tightened the noose around the economy’s neck, and if we deliver a heavy blow to our most important trading partners—don’t forget, these partners are not lambs to the slaughter; their countermeasures are already sharpened to a shine—there's a high probability that the American economy, this broken vehicle, will careen uncontrollably into the abyss of a "mild recession"! The so-called "reduction in severe recession risk" is laughably pale in the face of a real trade nuclear explosion!

Market Thunder: Your wallet will tremble in this rift!
Bond Market and the Dollar: A Frenzy for Safe Assets, the Collapse of Dollar Hegemony? Once tariffs kick the economy into a slowdown or recession, the "hawkish" mask of the Federal Reserve will be instantly shattered, and the sound of doves will surely echo through the skies. The frantic safe-haven funds will rush towards U.S. Treasuries like finding a lifeline, pushing prices higher. Even more brutally, the dollar's devaluation bell that started at the beginning of this year will be heavily tolled, with the decline resembling a floodgate opening! Foreign investors, watching dollar assets turn into hot potatoes, will engage in frenzied hedging actions to mitigate their exposure, only deepening the darkness of the dollar's plunge.

US stocks: A moment of heaven or hell, the industry's great escape has begun! Don't be deceived by the market's possible "strength"! The surface index is barely hanging on, unable to hide the bloody slaughter of the industry beneath it:
Industrial and capital goods "Iron Throne": These giants hold pricing power and can pass the increased costs of tariffs onto downstream customers like garbage. Even "luckier" for them, they can lie back on the bed of increased domestic investment and count their money! Winner takes all, cold and ruthless.
Consumer Goods and Retail "Slaughterhouse": This is a true hell! Import costs are skyrocketing like a rocket, and facing budget-conscious, furious consumers, do they have pricing power? Hardly! Profits are being squeezed dry, and a river of blood will be the norm. If not to escape now, when will they?

When the clock mercilessly strikes zero on August 1st, and the decisions from the White House fall like the Sword of Damocles, the market's numbness will be completely shattered by the iron fist of reality. Those lucky ones immersed in "tariff fatigue" will ultimately be violently torn apart by fluctuating sectors, awakened harshly by the howling devaluation of the dollar, and confronted with the cold reality of stagflation or recession.

This tariff storm ignited by arrogance doesn't care whether you are tired of it. It only cares whether the power of destruction is thorough enough.

When the bell tolls on Friday, do you think what’s on the White House desk is a trade agreement? Or is it the "economic nuclear button" that could blow up the global supply chain? Is your investment really ready to face this inevitable rupture?