The conflicts between the United States and its trading partners escalate. U.S. businesses fear to take damage. That’s why they try to escape tariffs through a backdoor, without upsetting Trump.
Ironically, Ivanka Trump could soon suffer from the trade policies of her father. Because the US President is planning from September punitive tariffs of ten per cent, among others from China, imported handbags and clothing – precisely those products which the First Daughter has set up her own fashion business. What is your now to doom: the bulk of The Goods, which are marketed under their Label, made in China.
The protectionist course Donald trump has, meanwhile, provoked against tariffs for the trading partners of the United States. Against which, in turn, the United States now have to file a complaint with the world trade organization (WTO). “We have us in a downward spiral,” says David Kotok, founder of asset management, Cumberland Advisors. The “trade war” had begun.
It also applies to U.S. companies
Trump has promised since his campaign to seize embattled U.S. industries under the arms. He saw as victims of unfair trade practices. But now the first of US are already feeling of companies negative consequences of trump’s trade policy. “In a globalised economy there are no winners in a trade war,” says Kotok.
Prominent victim of the US trade dispute? President’s daughter and fashion entrepreneur Ivanka Trump
Especially multi-national corporations with international supply chains are affected, and this in two ways. On the one hand, their products abroad by counter-tariffs to be more expensive and less attractive in comparison to the Goods of domestic competitors. Are already affected Whiskey, Jeans and motorcycles made by American manufacturers in the EU. Since 1. July also access the canadian customs duties on imports of goods in value of 16.6 billion dollars (14.2 billion euros) and more expensive in addition to steel and aluminum from the USA also consumer goods such as coffee. In China alone, 545 American goods are affected, including soy beans, Corn and cars. A Tesla would cost in China, so $ 20,000 more, reckoned the magazine Quartz.
U.S. companies produce more expensive and consumers pay for it
At the same time, production costs for domestic companies that have imported raw materials such as steel or aluminum, so far from abroad. The cost, says Kotok, would be enough in many cases to dealers and consumers. Affected are U.S. icons such as the food group Campbell Soup and beverage giants such as Coca-Cola and MillerCoors. The manufacturers themselves warn of the negative effects. There are simply not enough American aluminum, in order to meet the demand for the production of beverage cans, wrote to the brewer MillerCoors on Twitter. “As a result of this misguided punitive tariffs will suffer in the end, American workers and consumers.” At the latest with the most recent round of tariffs on consumer goods from China, the government meets the U.S. consumer directly.
The US economy could suffer
In the long term, Trump will damage the American economy, say Economists. The financial analysis company Moody’s Analytics projected that recently already until next summer, with 700,000 jobs lost. Economic growth and rising consumer prices, the Inflation’m going to wear, believes Economist, Kotok. “The consequences will emerge at the earliest in the next three to nine months in the data,” says Kotok.
JP Morgan Chase CEO Jamie Dimon: “The duties will do more harm than help”
Accordingly, there is wind from the world of politics and the economy. One of the largest lobby groups in Washington, the Business Roundtable, warned a few weeks ago, the trade policy of the White house would sabotage the stimulating effect of the tax reform “”. Jamie Dimon, Chairman of the Lobby, and CEO of the investment Bank, JP Morgan Chase, told reporters: “The duties will do more harm than help.”
But so far, only a few companies take a public position. “The fear of bumping Trump in front of the head, is large,” says Kotok. In the past, Trump had sent shares with a single Tweet on descent. The motorcycle manufacturer Harley-Davidson moved just a few weeks ago the wrath of Trumps, as he announced to move part of its production abroad, in order to escape the duties of the EU.
Companies submit applications for exceptions
The majority of the US companies therefore tried, behind the Scenes, the impact of the duties on the own business cushion. More than 26,000 companies have made to the U.S. Department of Commerce applications, to be of the duties on imported raw materials except. The government had to admit, due to the high number of processing lag behind. Just 98 applications were processed, said trade Minister Wilbur Ross in a hearing at the end of June. Meanwhile, the trade Ministry, the news Agency Reuters informed, be up to 20. July of almost 26.500 applications 267 and 452 rejected have been approved.
The company, the Democrat, Ron Wyden, a member of the Finance Committee in the Senate, are in a grey zone, you don’t know, “if you can escape her ever”.
Especially smaller companies will suffer, says Wyden. Because the can’t afford a lawyer to fight for you in this matter. And even if the largest part of the requests will anyway be rejected. “Without any expertise and absolutely chaotic, the runs,” said Claire McCaskill, a Democrat from the state of Missouri. So going to be decided without a reasonable basis, who loses from the U.S. company and who will win.