Trump’s Trade War With China Is Officially Underway
Brent Bible, a farmer who cultivates 5,000 acres of corn and soy in western Indiana, said the trade war was already damaging his farm and the broader agricultural economy. More than half of American soybeans that are exported go to China, giving the country influence over the price of the American crop. Trade worries have pushed down the price of soybeans roughly 15 percent in recent months, erasing his typical yearly profit margin of 8 percent to 10 percent.
Mr. Bible said farmers are now putting off purchases of tractors, grain storage facilities and other items to make ends meet.
“If we’re not spending money,” he said, “then other industries aren’t making any money off of us, either.”
The Trump administration drafted its initial tariff list to spare consumers, and many of the products that American families purchase from China, like flat-screen TVs and shoes, are not directly hit on Friday. But American companies that depend on Chinese products are expected to feel the pinch, given the tariffs focus heavily on the kind of intermediate inputs and capital equipment that businesses purchase and ultimately sell both in the United States and abroad.
China’s Commerce Ministry accused the United States of “typical trade bullying” and said in a statement that its tariffs “will impact innocent multinational companies and ordinary enterprises and consumers alike.”
“It will also harm the interests of U.S. businesses and its people,” it said.
Economists say Mr. Trump’s trade war will raise costs for American industry, potentially threatening the manufacturing jobs that the president has long said he wants to protect. And some of those higher costs will ultimately work their way through the supply chain to American consumers.
Razat Gaurav, the chief executive of LLamasoft, which advises companies on organizing their supply chains, said that many of his customers have been making alternate plans to restructure their operations, with some choosing to set up in countries like Vietnam or Mexico. Others are postponing large investments, like new factories, and are trying to avoid signing long-term contracts with suppliers — all changes that will eventually take a toll on the economy.