The small-15 PMI is falling precipitously

 It's been a long-term project of mine to look at how smaller economies respond to the cycles caused by the larger economies, what I call the big 8:  the USA, the Euro zone, China, Russia, Japan, India, Brazil and the UK.  

Since I don't have official PMI data going back much before 2012 for most of these small economies, and since I want to examine patterns over several business cycles, what I have done is to use business confidence time series to estimate what the PMIs would have been if they were available.  The correlation is usually close between business confidence and broader-based PMIs.  In some cases there are "PMI" series produced by other agencies, for example in South Africa and Australia, or there are PMI-like indicators, e.g, Sweden and Switzerland, produced by national chambers of commerce or industry.

I have not extreme-adjusted these series.  Where they are "spiky", I have smoothed them by fitting 7- or 5-month centred moving averages.

The results for the GDP-weighted average of the small-15, recently expanded to include Turkey, Mexico and Malaysia, look like this, when compared with the Big-8:

Notice how, until recently, the small-15 more or less followed the big-8, which is what you'd expect.   In fact, the small-15 had started a new upswing, parallelling the upturn that had started in the big-8, though from a lower point.   And then, starting in January, the small-15 turned down, quite steeply.

The last time the US raised tariffs sharply, during the Great Depression (the Smoot-Hawley tariffs), this worsened the global and the US recession, turning it into the Great Depression, as jumps in US tariffs were followed by increases elsewhere.  Note that it was a Republican president, House and Senate which passed the tariff legislation, leading to a massive swing to the Democrats which lasted 20 years.

The trade wars initiated by Trump are having the same effect.  The collapse is just beginning.   And every month that the tariffs and the tariff uncertainty remain worsens the situation.   Obviously, if tariffs quickly return to pre-Trump levels, the recession will likely be short.  But even then, damage has been done, and trade flows will be permanently altered.   Unfortunately, Trump shows no signs of changing course.  Even the supposed "reset" with China would still apply 30% tariffs to Chinese exports to the USA.  There is no one grown up in the Administration who will talk him down from the ledge.  No one in the Republican Party has the courage to stop him.  They fear his MAGA movement too much.  By the time Congress does act, it will be too late.