It has been now more than a year since the China tariffs trade war started. While the US President Donald Trump has increased his target to $300 billion in Chinese goods for duties, more than a hundred top companies have expressed their frustration.
From Nike to New Balance, many American manufacturers expressed their worry, saying they would not be able to keep their profit margins as good if the tariffs would be to happen.
On Monday, a report published by the bank JP Morgan showed that some states’ economy were particularly hindered, especially California, Illinois and Tennessee. This might a U-turn for Trump who just announced he is running for the 2020 Presidential elections.
New Balance’s CEO comments
New Balance is one of the most famous sneaker brands in the United States. But just like any other brand soled in the country, many parts of its products are made outside of the country, including its soles, made in China.
After Donald Trump announced that he would expand its tariffs’ target and raise it to $300 billion worth of goods coming from China, New Balance’ VP Monica Gorman published unfiltered comments online.
"Trump’s proposed levies won’t “just translate into higher costs, but jeopardise our ability to maintain production levels and continue investing in our domestic factories”, New Balance vice-president Monica Gorman said in comments posted online."
— jaeger (@snarkyjaeger) June 18, 2019
Gorman then added: “Trump’s proposed levies will not just translate into higher costs, but jeopardize our ability to maintain production levels and continue investing in our domestic factories”, reported Yahoo News.
She also added that these new tariffs “would just translate into higher costs, but jeopardize our ability to maintain production levels and continue investing in our domestic factories”.
Not only tariffs would hinder their business, but it would slow down their supply chain, as many brands, including New Balance, would have to revisit their supply chain system.
Read on Alvexo: “Africa in the Midst of the US-China Trade War”
A round of hearings
Within a few hours, Sara Gorman’s comments went viral and many other companies joined her side, while supporting Trump’s initiative – a double take that New Balance itself has confirmed.
Main U.S manufacturers’ point of view is that while Chinese tariffs make sense, they should not apply to American products.
🎽 New Balance
These big-name companies are sounding the alarm: $300 billion worth of tariffs on Chinese goods would hurt their business in a major way https://t.co/qfpOLugd9i
— Bloomberg Opinion (@bopinion) June 20, 2019
More than 320 officials among who retailers, trade groups and companies are planned to appear for a session of hearings until next Monday at the U.S International Trade Commission to debate on the topic.
As it turns out, the US-China trade war has already affected the economy in Africa, but it is also now hindering the local economy – a trend that the last JP Morgan’s report has highlighted.
Tariffs hit some states hard
While Donald Trump has announced last May 25th that the tariffs would increased up to 25%, it seemed clear for many analysts that the United States will likely be on the front row of a harsh backlash.
According to JP Morgan, Tennessee, California and Illinois could undergo a harsh drop of their imports as a percentage of their GDP – from 4.7% for Illinois, 5.4% for California and up to 7.3% for Tennessee.
"Tennessee, Illinois, and California were the states hit the hardest when weighing imports as a percentage of state GDP, according to JP Morgan’s analysis."https://t.co/gTB5NlHeZ3 https://t.co/gTB5NlHeZ3
— John Hubbs (@JETTN1) June 24, 2019
In order to understand these numbers, JP Morgan listed “the top goods the U.S. imports from China, which included computers and electronics, electrical equipment, manufacturing commodities, machinery, and apparel and accessories.”, explained Yahoo News.
As a result, JP Morgan’s analysts found out that “in 2018, the U.S. imported $186 billion of computers and electronics from China, which was by far the single-largest category, trailed most closely by $50 billion of imports of the related electrical equipment grouping, which includes household appliances”.
This week’s hearings will be crucial for tariffs’ next steps.
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