As China Fires Back in Trade War, Here Are the Winners And Losers
Date: Wednesday, April 4, 2018
In the brewing trade-warbetween the U.S. and China, the list of losers already outweighs the winners.
President Donald Trump escalated tensions on Tuesday, proposing tariffs on a range of Chinese-made products worth about $50 billion with a focus on high-tech items. China wasted no time in firing back with 25 percent tariffs on imports of 106 U.S. products covering everything from soybeans, automobiles, chemicals and aircraft.
Here are some of the businesses affected on both sides of the Pacific.
Loser: America’s Midwest Farmers
The Chinese tariffs are a huge blow to American growers, especially those in Midwestern states that Trump needs to win re-election in 2020. China is the biggest buyer of U.S. soybeans, picking up about a third of the entire U.S. crop. The trade is worth about $14 billion. Soybean prices dropped as much as 5.3 percent in Chicago, the most since July 2016.
Winner: South American Growers
Brazil and Argentina are the main competitors to U.S. growers in the market for soybeans and corn. They’ll be eager to pick up any lost business, but they won’t be able to completely replace U.S. trade.
Loser: Tech Companies with Chinese Factories
The U.S. tariffs target the high-end technology products made in China. That could mean that companies like Apple Inc. and Lenovo Group Ltd. that operate significant Chinese production bases face higher costs or supply-chain disruption. The biggest blow by far is to almost $4 billion worth flat-panel TV screens, according to Bloomberg Intelligence.
Losers: U.S. Automakers (including Tesla)
China plans to slap tariffs on most vehicles including electric cars. Tesla Inc. is at particular risk as it relies on American-made vehicles for all its Chinese sales. Other U.S. carmakers such as General Motors Co. and Ford Motor Co. also manufacture in China.
One silver lining: American automakers that import electric vehicle batteries from China were spared from the U.S. tariffs. Batteries for items like power tools, watches and smoke alarms were hit instead.
Click here to read the entire article from the original source.
Have the News Delivered to you
Like what you see here? Why not let us send it directly to you?
Sign up to receive our Weekly Industry Newsletter, a compilation of all news articles that matter to you and your business.