U.S. industries have been shaking with news on trade tariffs. Duties on $34 billion of Chinese goods took effect this week while China has imposed retaliatory duties of similar size on American goods. Firms like General Electric Co. are making contingency plans should a trade war ensue and also say tariffs are the wrong way to address allegations on intellectual property theft by China.
Not only that, but some businesses tried to persuade President Trump to back down by saying they’d be left with no choice but to consider reducing production, firing workers and even shifting operations out of the U.S. to account for added costs from the imposed tariffs. The Trump administration did remove some products from the initial tariffs list after the companies and businesses groups objected.
U.S. Soybean farmers are taking a huge hit by the retaliatory duties because China is one of the top exporters for U.S. soybeans, accounting for about $14 billion in sales throughout 2017. Farmers are also feeling the burden with order cancellations and falling commodity prices. General Electric tried to remove over thirty product lines from the list of goods targeted for tariffs.
Companies in that industry worry that tariffs on products such as aviation and medical parts could hit American operations and jobs.
Analysts say, “We remain concerned that these tariffs could make it harder for U.S. manufacturers to compete in the global economy and will shrink rather than expand U.S. exports. We will have to work with the administration to minimize potential impact to our business.” Investors should be wary as there might be a significant downturn with industrials and other sectors within that realm.