A 2027 U.S.–China conflict with Australia aligned to the U.S. China trade stops immediately, Taiwan exports are slowed/limited, and China launches large-scale cyber disruption in waves. This is a planning scenario, not a forecast. Planning scenario, not a forecast. No end date is set.

Government and Public Services — United States (Investor-Grade, Downstream Focus)

Read the Australia briefingReport date 2026-11-07

What happens

Core benefits continue on a domestic payment book. On the June 30, 2026 fact sheet, beneficiaries in current-payment status were 71,255 thousand and the monthly rate was 138,058 million dollars. Those amounts are amounts due. They are not total trust-fund outlays. The monthly benefit rate was 138058 million dollars.
ssa.gov
The large civilian employer is state and local government. In March 2025, state and local governments employed 20.3 million people. Local government workers were 14.7 million, printed as 72.2 percent, and state governments employed 5.7 million, printed as 27.8 percent. State and local employment in that month was 20.3 million people. The local share of that state and local workforce is 72.2 percent. Local government employment was 14.7 million people.
census.gov
A China stop hits trade administration and covered federal purchases, not the existence of the benefit file. CBP FY 2025 total duty, taxes, and fees were 216,711,007,541 dollars, and the FY 2024 cell on the same row was 88,078,654,581 dollars. The calculated full-year duty increase is 146.0 percent. Section 301 China Products in the FY 2025 column were 35,545,043,248 dollars.
cbp.gov
Covered MAS supply cannot treat China as a Trade Agreements Act designated country. On the GSA lookup, China is No and Taiwan is Yes. The FAR overhaul page requires contracting officers to award contracts with Taiwanese firms or organizations through the American Institute of Taiwan. The federal fleet guide covers nearly 700,000 vehicles and over 5 billion dollars in annual operating costs, and it does not print a country of manufacture.
gsa.gov acquisition.gov gsa.gov
The distributed civilian set is municipal government. Municipal governments in the national total numbered 19491. Of those, 9,293 are in the population-size group of less than 1,000. Phobos ransomware actors have targeted municipal and county governments and have successfully ransom several million in U.S. dollars. The local pass-through requirement is 45 days.
www2.census.gov www2.census.gov cisa.gov cisa.gov

Why civilian government is hit in this scenario

China goods trade stops. Census goods with China in 2025 were exports 105,977.8 million dollars, imports 308,651.9 million dollars, and a balance of minus 202,674.1 million dollars. Those figures are economy-wide goods. The page does not assign them to a government buyer.
census.gov
Taiwan goods are slowed or limited. Census goods with Taiwan in 2025 were exports 54,760.4 million dollars and imports 201,369.2 million dollars. That national goods flow is not an agency IT share and it is not a foundry share. For covered federal contracts, Taiwan is a designated country and a Taiwanese firm must be awarded through the American Institute of Taiwan.
census.gov gsa.gov acquisition.gov acquisition.gov
Section 301 China Products are the printed China-specific fee line. The FY 2025 cell is 35,545,043,248 dollars. The FY 2026 cell on that row is 29,896,439,528 dollars. The FY 2027 cell is 2,559,196,004 dollars. The revenue table states that FY 2026 and FY 2025 are updated as of July 27, 2026, so the FY 2027 cell is not used here as a completed period.
cbp.gov
Covered federal vehicle and IT replacement cannot switch to a China end product on the MAS lookup, where China is No. The fleet operating base is nearly 700,000 vehicles, over 5 billion miles, and over 5 billion dollars in annual operating costs. Origin of those vehicles is unpublished on that page.
gsa.gov gsa.gov
Civilian systems are in the cyber path because government facilities include cyber elements and because Volt Typhoon is described as pre-positioning for a major crisis or conflict. Benefits and tax systems are treated as Wave 1 direct in this planning model. The alert itself does not name those systems.
cisa.gov cisa.gov
The later direct set is small municipal government. Phobos actors have targeted municipal and county governments. CISA tells state, local, tribal, and territorial organizations to be ready to shift to paper-based operations. FY 2025 SLCGP funding is 91.7 million dollars, and 80 percent of each state or territory allocation must support local entities.
cisa.gov cisa.gov cisa.gov

How hard, how soon

0–3 months

Short-horizon analog: the monthly benefit rate was 138058 million dollars. That is one month of amounts due for 71,255 thousand beneficiaries. It is not a year-over-year peak. A benefits-platform outage measured in days was not on the pages opened. The IRS refund-status page prints a scheduled window, not a cyber incident and not a counted outage in days. The system is unavailable every Monday from midnight to 3 a.m. Eastern Time.
ssa.gov irs.gov
The published short clock that is not an outage is the grant rule. The local pass-through requirement is 45 days. The follow-up letter is due within 10 calendar days after that period.
cisa.gov

1–6 months

Trade-administration cost band: the calculated full-year duty increase is 146.0 percent. The two cells are 216,711,007,541 dollars and 88,078,654,581 dollars. Section 301 China Products in the FY 2025 column were 35,545,043,248 dollars. The partial FY 2026 duty cell of 333,713,429,999 dollars is not treated as a full year.
cbp.gov

12+ months

Annual operating bases: IRS expenditures were 19.0 billion dollars, the fleet guide prints over 5 billion dollars in annual operating costs, and calendar-year 2025 Social Security benefit payments were 1,596.5 billion dollars. State and local employment in that month was 20.3 million people. None of these replaces the one-month benefit analog.
irs.gov gsa.gov ssa.gov census.gov

Wave 1

Wave 1 direct is Social Security benefits, federal tax administration, and customs duty administration. Wave 1 indirect is federal civilian fleets, because the trade rule binds immediately, and in-person service channels, because walk-in load follows a website failure. Government facilities are a critical infrastructure sector, and Volt Typhoon is the pre-positioning advisory. The week split is a planning model.

cisa.gov cisa.gov ssa.gov irs.gov

Wave 2

Wave 2 direct is state agencies. Wave 2 indirect is civilian contractors who lose task orders when those systems or a covered supply line stop. State employment of 5.7 million is the scale of that tier.

census.gov cisa.gov

Wave 3

Wave 3 direct is local permit offices and small municipal governments. The counts are 19,491 municipalities and 9,293 under 1,000 population. Phobos is the municipal ransomware pattern. The local pass-through requirement is 45 days, which funds local entities and does not by itself set the wave order.

www2.census.gov cisa.gov cisa.gov

Country exposure

origin sharepercent

72.2levelLocal share of state and local employment

The local share of that state and local workforce is 72.2 percent.

Census ASPEP 2025 summary

Cost and price shock by time bucket

price changepercent

146.0increase1-6 monthsFull-year duty increase

The calculated full-year duty increase is 146.0 percent.

CBP trade statistics

monthly benefitmillion dollars

138058level0-3 monthsMonthly benefit rate

The monthly benefit rate was 138058 million dollars.

SSA OASDI fact sheet

Downstream scale

sitescount

19491levelMunicipal governments

Municipal governments in the national total numbered 19491.

Census of Governments 2022 organization, local governments by type

us workforcemillion people

20.3levelState and local employment

State and local employment in that month was 20.3 million people.

Census ASPEP 2025 summary

14.7levelLocal government employment

Local government employment was 14.7 million people.

Census ASPEP 2025 summary

Operating prints

daysdays

45levelLocal pass-through

The local pass-through requirement is 45 days.

CISA SLCGP fact sheet

ratespercent

37.7levelIRS enforcement share of funding

Enforcement was 37.7 percent of IRS funding.

IRS Data Book 2025

What to do

Day 7

Confirm the current-payment file can be produced from a backup and that paper or in-person intake is drilled. CISA asks for incident-response plans drilled on an annual basis at a minimum and names paper-based operations.
cisa.gov
Freeze new covered MAS awards that would need a China end product. China is No on the lookup. Route any Taiwanese firm through the American Institute of Taiwan.
gsa.gov acquisition.gov

Day 30

Watch the next Social Security current-payment print against 71,255 thousand beneficiaries and 138,058 million dollars. Both lines are planning lines.
ssa.gov
Check whether the state has started the 45-day local pass-through clock. The local pass-through requirement is 45 days.
cisa.gov

Day 90

Re-baseline Section 301 China Products against 35,545,043,248 dollars and against the planning line of 17,772,521,624 dollars, which is half of that FY 2025 cell, calculated. Keep the partial FY 2026 duty cell of 333,713,429,999 dollars labeled partial.
cbp.gov
Inventory fleet and IT replacements against the nearly 700,000 vehicle operating base. Record origin where the agency knows it. The customer guide does not.
gsa.gov

What to watch

OASDI beneficiaries in current-payment status, thousands. Act when the current-payment count prints below 71255 thousand beneficiaries. The latest print is 71,255 thousand. The 71255 line is a planning line. SSA does not publish it as a covenant.
ssa.gov
OASDI monthly rate, million dollars. Act when the monthly rate prints below 138058 million dollars. The monthly benefit rate was 138058 million dollars. The 138058 line is a planning line. SSA does not publish it as a minimum payment covenant.
ssa.gov
Section 301 China Products, dollars, comparable full fiscal year. Act when a comparable full fiscal-year print of Section 301 China Products falls below 17772521624 dollars. That threshold is half of 35,545,043,248, calculated. It is a planning line. CBP does not publish that half as a target.
cbp.gov
SLCGP local pass-through, days after FEMA release. Act when local pass-through is still incomplete 45 days after FEMA releases the funds. The local pass-through requirement is 45 days. This 45-day line is the published FY 2025 grant rule, not a planning line.
cisa.gov

By role

Federal benefit and tax operators

Protect the current-payment file and the filing-season pipeline first.
Stage paper intake for the month the website fails.
Report the monthly beneficiary count and the monthly dollar rate against the planning lines.

ssa.gov irs.gov cisa.gov

Customs and trade-fee managers

Separate China Products entries from the rest of the entry summary book.
Keep the FY 2026 duty cell labeled partial as of July 27, 2026.
Use 35,545,043,248 dollars as the last full Section 301 China Products baseline.

cbp.gov

State agencies and SLCGP recipients

Start the 45-day local pass-through when FEMA releases funds.
Push support to the 9,293 municipalities under 1,000 population.
Drill paper permit acceptance.

cisa.gov www2.census.gov

Civilian contractors and fleet buyers

Stop offers that depend on a China end product for covered MAS supply.
Send Taiwanese firms through the American Institute of Taiwan.
Record vehicle and IT origin in the agency file because the fleet guide does not.

gsa.gov acquisition.gov gsa.gov

Weekly checks

OASDI beneficiaries in current-payment status, thousands The latest print is 71,255 thousand. A print below 71255 thousand is the planning line for a file that is not completing.
ssa.gov
OASDI monthly rate, million dollars The monthly benefit rate was 138058 million dollars. A lower print is the planning line for a delayed payment file.
ssa.gov
Section 301 China Products, dollars The FY 2025 cell is 35,545,043,248 dollars. The planning line is 17,772,521,624 dollars.
cbp.gov
Days since FEMA released SLCGP funds to the state The local pass-through requirement is 45 days. That clock is a grant rule.
cisa.gov
IRS returns processed against the FY 2025 base of more than 271.4 million A filing-season outage stacks a book that was more than 271.4 million returns and other forms.
irs.gov

What is not known

Observed baselines are the Census ASPEP publication, the 2022 Census of Governments organization files linked from the governments tables page, the SSA fact sheet, the IRS Data Book PDF, the CBP trade page, the Census goods balances with China and Taiwan, the GSA lookup and fleet guide, FAR 25.003, FAR 25.402, the FAR overhaul part 25 page, and the CISA sector, Volt Typhoon, Phobos, SLTT, and SLCGP pages. Wave order is a planning inference.
census.gov ssa.gov cisa.gov
The unpublished primary is the China or Taiwan share of civilian-agency, state and local, and federal-fleet IT and vehicle purchases. National goods totals and Trade Agreements Act status are published. A benefits-platform outage in days was not published. A municipal permit-volume series was not used. The FY 2027 Section 301 cell of 2,559,196,004 dollars is printed and is not a completed short-horizon period under the July 27, 2026 revenue-table stamp.
census.gov census.gov gsa.gov cbp.gov
Calculated figures use two printed inputs and are labeled. The duty increase of 146.0 percent uses 216,711,007,541 and 88,078,654,581. The planning half of Section 301 uses 35,545,043,248 divided by 2, which is 17,772,521,624. The federal-plus-state residual uses 90,888 minus 90,837, which is 51, and the table notes already say the total includes the federal government and the 50 state governments. The ten municipal size groups sum to 19,491. The printed 72.2 percent is not replaced with a fresh division of 14.7 by 20.3.
cbp.gov www2.census.gov www2.census.gov www2.census.gov census.gov
Census organization counts five basic local types, and the municipal file uses ten population-size groups. This report's nine nodes are a planning map for benefits, tax, customs, fleets, state agencies, contractors, permits, small municipalities, and in-person channels. They are not a typology printed by Census or CISA. CISA counts 16 critical infrastructure sectors. Education facilities are a named subsector and are not the subject. Independent school districts, 12,546, are counted and then left to the education report.
www2.census.gov cisa.gov cisa.gov www2.census.gov

Working papers: node summary

Node	Primary impact	Time horizon	Cyber wave	Evidence
Social Security benefits	Monthly benefits due keep being the operating book, and a platform outage delays the June-scale payment file.	0-3 months	Wave 1 (direct)	SSA fact sheet; CISA Volt Typhoon alert
Federal tax administration	Refund and collection systems are the federal cash channel, and a filing-season outage stacks returns that still have to be processed.	0-3 months	Wave 1 (direct)	IRS Data Book 2025
Customs duty administration	China-entry workload and Section 301 duty assessment stop or re-route when China trade stops.	0-3 months	Wave 1 (direct)	CBP trade statistics; Census China goods
Federal civilian fleets	Covered federal vehicle and IT buys cannot switch to a China end product, and a Taiwanese firm must clear AIT.	0-3 months	Wave 1 (indirect)	GSA fleet guide; GSA TAA lookup; FAR overhaul part 25
State agencies	State systems that sit behind federal benefits and their own programs lose the enterprise layer in the second wave.	1-6 months	Wave 2 (direct)	Census ASPEP; CISA SLCGP
Civilian contractors	Contractors lose task orders when an agency system or a covered supply line stops.	1-6 months	Wave 2 (indirect)	GSA TAA lookup; IRS Data Book
Local permit offices	Permit counters at municipal governments stop accepting electronic filings when the local system is down.	1-6 months	Wave 3 (direct)	Census of Governments municipal count; CISA SLTT
Small municipal governments	Governments under 1,000 population are the distributed set a municipal ransomware crew already targets.	1-6 months	Wave 3 (direct)	Census municipal size groups; CISA Phobos alert
In-person service channels	Walk-in load rises when the benefit or tax website is down.	0-3 months	Wave 1 (indirect)	SSA fact sheet; IRS Data Book; CISA SLTT

Government and Public Services — United States (Investor-Grade, Downstream Focus)

What happens

Why civilian government is hit in this scenario

How hard, how soon

0–3 months

1–6 months

12+ months

Wave 1

Wave 2

Wave 3

Country exposure

Cost and price shock by time bucket

Downstream scale

Operating prints

What to do

Day 7

Day 30

Day 90

What to watch

By role

Federal benefit and tax operators

Customs and trade-fee managers

State agencies and SLCGP recipients

Civilian contractors and fleet buyers

Weekly checks

What is not known

Sources