Financial markets are once again registering displeasure with President Trump’s trade dispute with China.

In January, investors were optimistic about a resolution to the standoff by the March 2 deadline Trump has imposed. Stocks had a banner month, with the S&P 500 index up 9.6%.

Stocks have been heading the other direction lately, amid news reports and comments from White House advisers suggesting the two sides remain far from a deal.

As the deadline gets closer, stocks are likely to continue gyrating amid competing reports of OPTIMISM! and PESSIMISM! regarding a deal. If there is a deal, trade between the two giant economies will normalize, and stocks will rally. If there’s no deal, more tariffs and other trade barriers will fall into place, and stocks will sink.

But this notion of a binary set of outcomes is probably mistaken. More likely is a messy outcome that drifts past the March 2 deadline and is not nearly as definitive as anybody would like. In fact, the ongoing deliberations over funding for the U.S. government, and actual or threatened shutdowns, might be a model for how the China negotiations are likely to unfold as they head toward a climax.

First of all, there’s nothing concrete about the March 2 deadline. Trump came up with that date last year, when he said he’d impose a new round of tariffs on Chinese imports if there was no deal by then. But he could change the deadline, or even cancel it. He won’t do anything until very close to witching hour, because doing so would ease the pressure on China to make concessions. But if the two sides are far from a deal, extending the deadline is an exit ramp. That would be similar to the temporary spending bills Trump signed on Jan. 25 to end the government shutdown, which gave negotiators a window to work on more permanent solutions.

The Chinese know this. So they’re not likely to be cowed by threats of terrible things that will befall them if they don’t do what Trump wants by 11:59 pm on March 1. And they might not give Trump much of what he wants at all.

China not backing down

Trade experts think there’s little chance China will give up on its plan to dominate 10 key global industries by 2025, or stop using huge state-owned companies to gain an edge on global competitors. It’s also unlikely to stop stealing technology to speed the development of its own economy. Trump wants concessions on all three issues, and China would probably accept more punishing tariffs before caving to Trump on these matters.

Other demands might be easier for China to meet. It wouldn’t be hard for China to buy more U.S. exports, or to gradually give U.S. firms more direct access to the Chinese market. American negotiators keep emphasizing the need for enforcement, because China could go back on any promises made, or simply change its policies if Trump is no longer in office. All told, there are a broad spectrum of issues at play, ranging from areas of possible compromise to dogmatic matters on which the Chinese are unmovable.

Trump needs a deal he can point to as a win, on a timetable that doesn’t make him look like a schmuck. He can probably buy time for a few more months, to hammer out a deal on the hardest issues. But if China talks persist through 2019 or go into 2020, it will look like the Chinese are rolling Trump and stalling until a successor is in place.

On substance, Trump can claim a win if he can reduce the U.S. trade deficit with China, which he has characterized as a national problem. If China buys more US exports, and imports to the US stay more or less the same, the US trade deficit with China will decline and Trump can say he won. He could revoke the tariffs already in place, and take credit when stocks climb.

What Trump probably can’t do is call China’s bluff, and put more tariffs in place when China refuses to make the toughest concessions. Again, the January government shutdown shows why. Trump caved on the shutdown when it started to cause real turmoil at airports and in other parts of the economy, and Congressional Republicans said they could no longer stand behind him.

The same thing will happen with China if there’s no deal and Trump escalates his tariffs. Stocks will fall, and Trump’s fellow Republicans will try to dissociate themselves from Trump’s self-punishing behavior. He’ll end up with few allies and many critics, and end up caving as his approval rating falls, perhaps even lower than it did during the shutdown.