A world in which the US and China both have 50/100% tariffs - how does it play out

If U.S.–China tariffs are here to stay, how is that *not* massively inflationary for the U.S.? We’re talking about potentially doubling the cost of countless goods — electronics, clothing, raw materials. And China, while still holding firm, looks increasingly fragile: devaluing the yuan, artificially inflating its markets, and dealing with deep structural issues.

From a market perspective, it feels like the S&P 500 (and equities in general) haven’t really priced in this new long-term reality. Valuations still seem to reflect the hope of a deal or some kind of rollback. But if this is the new baseline — persistent tariffs, global fragmentation — isn’t there a lot more downside ahead?

Curious what others think. Are we underestimating the impact of a permanently fractured U.S.–China trade relationship?