President Donald Trump’s tariff threats have been causing havoc on the stock market and stirring confusion and counter-threats from overseas.
With China and the United States looking toward reconvening negotiations on trade issues,
Trump’s declaration that he wanted to slap another 10 percent tariff on goods imported from China came as a shock to just about everyone.
A beforehand health stock market tumbled, rebounded a bit and tumbled again.
Nervous investors over Trump’s tariffs, who otherwise have been enjoying a strong economy, are not sure what to make of the president’s antics.
The root of the brewing trade war goes back to concerns that China steals or pressures companies to hand over technology.
The Trump administration worries that American industrial leadership might be threatened by Chinese plans for government-led creation of global competitors in robotics and other technologies.
Europe and Japan echo U.S. complaints that those plans violate Beijing’s market-opening commitments.
Those concerns are legitimate reasons for further negotiations and agreements so that the economy can continue what has otherwise been a positive run in recent years.
China has signaled the likelihood of imposing counter-tariffs on U.S. goods, which would hit American exporters. The stock market sold off sharply on Friday, in part over concerns about the effect on corporate profits.
For retailers already feeling pressure, the higher prices would hit hard just as the critically important holiday shopping season was getting under way.
Some companies are considering moving up their delivery of goods before the new tariffs take effect.
Peter Bragdon, executive vice president at Columbia Sportswear, said his company had been diversifying away from China and now makes products in more than 20 countries. He said he thinks companies like Columbia Sportswear will fare better than the smaller outdoor rivals.
Companies were already shifting to suppliers outside of China in countries such as Vietnam to avoid the existing tariffs on $250 billion worth of Chinese imports. But plenty of clothing and footwear companies are still vulnerable, and the president’s announcement means that all Chinese imports might be taxed.
Judging the merits of Trump’s hardline tactics is difficult at this point. If he is successful in securing measurable agreements with China, no one will have many complaints.
Nevertheless, threatening more tariffs while there is still time to negotiate and maintain decent relationships between the two nations seems a rash decision on the president’s part.
Americans can appreciate the president’s determination to make trade more fair for domestic companies. The effort should at least have another round at the negotiating before inciting panic in the market and among businesses.