How is the Trade War Going, and an Underappreciated Risk

It looks like a new, renamed NAFTA has been negotiated. This is no surprise; I said as much last month. All sides had too much to lose and too much to gain for it not to get done. It's possible that the Democrats will hold it up in congress just to spite Trump, but probably not. There are lots of powerful constituencies working in favor of it.
The key part of it, AFAIC, is the reduction of non-North American auto parts. China was using NAFTA as a way of penetrating the N. American car market. Chinese components were shipped to Mexico and then assembled into vehicles. The percentage of Chinese parts in Mexican production is still small (~7%), but rapidly growing. The new agreement reduced the amount of that that can go on. BTW, this is now going on all over Asia. Chinese exporters are shifting their final finishing into Vietnam and elsewhere, to avoid US tariffs. There was a good article on this in yesterday's WSJ. How long this will be allowed is questionable.
I doubt all this will hurt the US or world economy much. The increase in final prices to consumers will be quite small. The production will have to be done somewhere, even if it adds a few extra transportation dollars.
I also doubt that the Chinese economic numbers will suffer much. The government has plenty of levers to keep things almost on course. Note that I say economic numbers. The actual economic benefit from the numbers may well go down. Much of China already has decent infrastructure. Adding more will have diminishing utility. But they will be built.
One risk I don't think is getting enough attention is the financial situation in India. Several non-bank financial institutions, including one very big one, have had to get government bailouts. Apparently this is not because of macro shifts; this company has been doing badly for years, but was able to hide it in its accounts. India should be the growth story of the next generation, so it's important to keep a watch on this.