Effects of Commercial War are already seen in the United States
The trade dispute, tariffs and swings of Donald Trump in foreign policy matters do not know where they will arrive or if they will even have an end. The economic war that began with China over the supposed theft of technology continues to threaten the jobs of thousands of Americans, even those who believe in the electoral promise of Trump, of America First. The Americans themselves will suffer the negative effects of the economic "battle", not only from the point of view of products from China but also several could be dismissed if many companies do not receive the requested exemptions.
To make matters worse, a new list of Chinese imports will be taxed. After imposing import tariffs on solar panels and washing machines in January, Trump doubled the bet last month by announcing rates on imports of steel and aluminum and levies on other products for about 50 billion dollars.
The increase in tariffs in the aluminum and steel sector is already revealing the first negative results it would bring to the US economy. The Department of Commerce itself predicts that it will cost millions of dollars to large firms. He has also warned about the unrest of several business sectors that supported Trump.
The president began the war to punish China for the supposed boom in the technology sector, but also to stop the Asian train in economic growth. With these measures, he intended to lacerate Chinese exports in key areas for the economy of the Asian giant. According to Trump, "China flooded global markets with cheap steel and aluminum." Logically, the president sought to "push" American companies in these areas, which while driving, has also deteriorated the main buyers of raw materials.
Recently, the Associated Press noted that in Oklahoma, Texas and Wisconsin, "furniture, energy and food companies describe the financial difficulties they would face if they were not exempted from paying steel tariffs." This has ruined dozens of jobs in school and office furniture factories due to the production costs involved and the dismissal of workers are one of the first measures to protect profits. But not only the accounting weighs on the producers, also the quality.
According to PolyVision one of the furniture producers, they need a type of aluminum that is obtained in Japan only and due to the tariffs on aluminum and steel, the importation of said raw material could fall, therefore its production too. A Steelcase spokesman said that "without an exemption, the economic viability of PolyVision and the small town of Okmulgee would be in jeopardy."
So far, tariff exemptions only have some commercial partners such as the European Union, Mexico and Canada.
Putting the balance in balance will be a complex task. Trump has not only settled his country in the political, racial and human rights fields. Also in the business is making a difference. John Hritz, CEO of JSW Steel USA plans a $ 500 million renovation that, he says, will create hundreds of new jobs.
Meanwhile, a Borusan Mannesmann Pipe steel industry not to have the exemption would have to pay fees of between 25 and 30 million dollars per year.
The pipes that Borusan produces are used mostly in oil and natural gas wells and if the indicated quantities of steel cannot be imported due to the prices, they will be forced to "save" themselves with the dismissal of employees. Specialists of the prestigious news agency Reuters believe that to reach 100 billion dollars in taxes in a fast way, Donald Trump would have to tax cell phones, computers, toys, clothes, footwear, furniture and other consumer goods. In doing so, retail sales would skyrocket. Therefore, the same would end with the retail companies that to say of him, Amazon has engulfed.
However, it is expected that while US consumers will not enter the Chinese market for prices, they will target other cheaper markets. The question would be whether Donald would also harass those markets. Those measures will affect others sectors. Donald Trump is taking protectionist rules to become one time again America in a main producer and industry in the world. However, the president forgets that global economy and local is like a complete body, and shares of automakers, airplane makers, can food producers will fall and many workers will be fired because of the higher costs of the raw materials.
The impact of tariffs on consumers will depend on variables that make it difficult to calculate product by product. Companies can absorb some costs and some will even have the option of switching production from China to other countries, reducing the impact for US buyers.