A Very Brief Reprieve?

Here's what has the market jumping this morning (Dow futures point to a 200-point surge at the open):

"....the US ambassador to Germany has proposed lowering auto tariffs to zero on both sides of the Atlantic. This would be beneficial to both the US and the EU for a variety of reasons, and represents a significant retreat in anti-EU trade rhetoric from the Trump Administration. The Stoxx 600 Autos & Parts sector is up 4% as-of this writing, the most since the postBrexit bounce back in summer 2016."   Bespoke Investment Group

And, alas, here's what we're looking at tomorrow:

"The first wave of U.S. tariffs on $34 billion of Chinese exports will take effect on July 6, according to a statement from the U.S. Trade Representative, which didn’t specify a time. China’s response of additional tariffs on U.S. goods will be effective “immediately” thereafter." Bloomberg

While the value of targeted goods is light relative to each country's GDP, quantifying the risk in such terms could be a huge miscalculation:

“The tail risk of a Sino-US trade war is getting fatter,” said Chi Lo, greater China senior economist at BNP Paribas Asset Management in Hong Kong. “The two sides may misjudge each other’s intentions when patriotism takes over rationality, and push themselves into an escalating series of attacks and retaliation.”   Bloomberg