The market has no real idea as to whether or not President Trump will hike tariffs on more than $150 billion worth of goods, including consumer goods, on December 15. But it’s best to hedge as if he will.

Every Asian trading desk was in sell mode on Tuesday after Commerce Secretary Wilbur Ross said the December 15 tariff schedule is still active unless the phase one trade deal gets signed within the next two weeks.

On Wednesday morning, Bloomberg reported from China that U.S.-China trade talks were going well, quoting anonymous sources. Stocks rose as result today.

Brian McCarthy, head of strategy for Macrolens, a boutique investment research firm with a keen focus on China, thinks markets are in a “fool me twice” scenario.

“Phase one is loser both politically and strategically,” he says. “It’s the ‘anti-MAGA deal’ — short-termism borne of weakness. I see Trump avoiding this blunder and tariffs going up on December 15.”

China says it wants a rollback on tariffs before reaching a deal.

Market sensitivity to trade talks has risen due to the lack of clarity on the phase one mini-deal coupled by increased tensions over anti-China human rights legislation. Trump signed the Hong Kong Human Rights and Democracy Act last week.

There is a desire in the Trump camp to avoid the December tariffs because it will surely tick off a key constituent going into 2020. And if prices go up on low cost retail goods like apparel, it could undermine wage gains, hurting Trump’s re-election bid.

But a postponement of the phase one deal, as Trump alluded to this week, will likely require a sign of renewed good faith between Beijing and Washington. How that happens following the latest attacks on China for human rights, and this week’s NATO meeting acknowledging China as a military threat, remains a mystery. It would be capitulation from Xi Jinping to sign a deal now. He can buy time in hopes Trump is replaced by friendlier forces next year.

“The fate of the December tariff increases remains the biggest issue of concern for the moment,” writes Raymond James & Associates policy analysts led by Ed Mills in a note to clients today. Mills says the market is “likely upgrading the probability” of tariffs in light of Washington’s tacit support for the Hong Kong protesters and its continued attacks on Huawei, the world’s largest telecommunications equipment manufacturer.

“These developments raise fears in the final two weeks before a critical decision on the fate of the December 15 tariff increases,” the Raymond James report authors wrote.

Assuming tariffs go up in December, China may retaliate by creating its own blacklist of U.S. companies, or banning official China business with lawmakers that backed the recent human rights bills.

“Investors need to be cautious,’ says Neil Mackinnon, senior economist for VTB Capital in London.

Recent PMI data for November showed signs of ‘green shoots’ for the global economy. If they don’t wilt on the news of more tariffs, there will be headlines suggesting that they are.

For much of the last three months, news of businesses holding back on investing because of trade uncertainties have caused some investors to flip the switch to risk-off. Global stock markets beat the odds and rose anyway thanks to easy money policies flooding the zone.

The global economy is still fragile. Trump’s threat to shelve phase one and hike tariffs on consumer goods in December represents a headwind many in the market were starting to discount going into 2020.

“This escalates the longer term hegemonic battle between the U.S. and China,” says Mackinnon. “Financial markets have understandably responded by going into ‘risk off’ mode.”