President Trump’s trade war with China is expected to last much longer than initially thought – extending into the second half of 2019, experts state.
The Main reason: Neither Washington nor Beijing want to appear politically weak at home, and both are prepared to absorb economic pain.
According to a new Axios report, President Trump’s trade war could affect companies employing some 11 million blue-collar workers, as the threat of an imminent trade escalation could strike by the end of the week.
The chart below depicts companies affected by Trump’s dangerous trade policies are mostly concentrated in rural, deeply red, deindustrialized regions of the country, with political consequences for the Trump administration in 2018 and beyond.
Axios said the map tracks the geographical impact of both current and threatened retaliation. The darker a region, the higher the concentration of affected industries there.
Methodology: We calculated the concentration of industries in each county compared with the national average. To get there, we gathered lists of goods facing tariffs from Canada, China, Mexico, and the European Union. The data is from the U.S. Chamber of Commerce and the Bureau of Labor Statistics’ Quarterly Census of Employment Wages (Source/ Axios)
Last week, President Trump proposed tariffs on $200 billion of Chinese goods, which could go into effect later this week when a public comment period on the taxes concludes. If Trump proceeds this week or next, it could be the most significant round of taxes Washington has imposed on Chinese imports this year. Trump slapped 25 percent tariffs on $34 billion of Chinese imports in July and another $16 billion last week. China has also seen tariffs on aluminum and steel that the US imposed on imports for much of the world.
China is the US’ largest trading partner. Approximately $506 billion of Chinese goods were sold in the US last year.
Trump launched the trade war as a means to penalize the Chinese for its unfair trade practices, such as stealing intellectual property. Beijing has repeatedly accused Trump of trade bullying.
Tit-for-tat has become the norm for China, as both countries dig in for a deepening trade war that is already causing many experts to warn about a global slowdown. To date, Beijing has imposed a 25 percent tariffs on $50 billion of American products. It has also threatened to respond to the newest round of US tariffs with a proposed tax on $60 billion of US goods.
As for the 11-million blue-collar workers, well, employment in rural, deindustrialized regions in the US can be exceptionally vulnerable to shifts in the global economy, said Mark Muro, a senior fellow at the Brookings Institution. “In a small county, a single meat packing establishment can provide hundreds of jobs and make up a large share of that county’s total employment,” he told Axios.
Experts believe once Trump’s tariff on $200 billion of Chinese goods goes through, well, Beijing’s tit-for-tat $60 billion tax on US goods will strategically target Trump’s base in rural America just in time for the US midterm elections.
There are no winners in a trade war.
via RSS https://ift.tt/2oUXZrT Tyler Durden