The pain threshold

Time is running against the U.S. government. Indeed, with the mid-term U.S. Congress elections in less than 17 months, the situation is as follows:

1)      American companies have been quick to reduce hiring and spending due to the uncertainty relative to the tariffs, inducing a risk of recession in the United States;

2) The longer the economic malaise persists, the higher the probability that republicans lose the mid-term elections;

3)      The higher the probability that the republicans lose the mid-term elections, the less companies will make significant investment decisions now due to the regulatory uncertainty of “what could happen in the case of a change in the control of the U.S. Congress (possibility of removal of trade tariffs)

4)      The longer companies wait to see what happens with the mid-term elections, the worse the economic malaise.

And the cycle repeats at step 1.

U.S. republicans are extremely nervous at their moment that they may lose their razor-thin majority in the lower house. Their pain threshold is being reached.

It appears there quite obvious that Trump will sign trade agreements fairly soon.