This has been the impact of trade war on USA’s economy

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The purpose of the trade war with China is to pressure them to reverse their questionable commercial practices, but the damage to the domestic economy is already being felt

This has been the impact of trade war on USA's economy

So far in the commercial war between the United States and China, it is difficult to identify any party that is gaining some of the confrontations. Amid the uncertainty that this war brings to the world economy, Trump asks its constituents for confidence in their negotiation skills. He considers himself capable of pressuring China to change its questionable business practices, but it could be making a huge mistake.

Leer en español: Este ha sido el impacto de la guerra comercial en la economía de los Estados Unidos

The footwear industry expresses its discontent

This week a letter signed by 173 footwear companies, including Nike and Adidas, arrived at the White House, asking the Donald Trump government to reconsider its position, since the new tariffs can cause an increase of up to 50% in the price of footwear, threatening the purchasing power of the population and the continuous employment of workers in this industry.

Of all the shoes sold in the United States, 70.7% of them come from China, according to data from the Department of Commerce of this country. For these goods, tariffs start at 11.3% of the total price but can rise to 67.5%, a resounding figure that alarms footwear manufacturers, among which are also Clarks, Converse, and Dr. Martens.

Last week, Trump announced that it would increase the levies on Chinese merchandise, even more, going from 10% to 25%, which contributed to the panic of the North American footwear industry.

"Adding a 25% increase to taxes above existing tariffs could mean that American working families have to pay up to an additional 100% for their shoes", they said in their letter. "It's time to bring the end of this commercial war," they concluded.

Read also: Can commercial war bring about a new global recession?

For Trump, the solution depends on these companies moving their factories to the United States, but for shoe companies, this is not easy.

"Footwear is a capital-intensive industry, there are years of planning involved in making these decisions and companies can not simply move their factories to adjust to these changes," the 173 companies said in their letter.

A blow for rural economies

It is no secret that Trump relied on the rural population of the United States to ensure his election in 2016, so meeting his needs should then be a priority in his government, but the trade war has already caused many problems.

First, the executive order signed by President Trump that prohibits telecommunications companies access to technology that poses a threat to national security. As such, some companies, mainly from the Chinese supplier Huawei, have had unsuspected impacts in rural areas of the United States.

In these remote areas, telecommunications companies depend on cheap suppliers like Huawei to ensure coverage. Since they do not have many subscribers, it is not profitable to acquire equipment of greater size and price.

While the largest telecommunications companies in the United States, such as Verizon and AT & T, do not use Huawei equipment, some of the small suppliers of this service in rural areas rely heavily on Chinese manufacturing equipment.

"You could not call 911 if the network is disabled," said Carri Bennet before CNN, representative of the Rural Wireless Association, which brings together rural telecommunications providers.

Many farmers, particularly in the soybean, corn and wheat industries, also see their incomes threatened by Trump tariffs.

"The farmers were Trump's voter base. They helped elect this president (…) now he turns his back on them when they need it the most, "John Wesley Boyd Jr., a soybean grower, told CNN.

Even beyond this, according to a study by the Brookings Institution, more than 2.1 million industrial workers, in industries as diverse as aeronautics, brewing and the tobacco industry, could see their jobs threatened by the continuation of the trade war.


LatinAmerican Post | Pedro Bernal

Translated from "Este ha sido el impacto de la guerra comercial en la economía de los Estados Unidos"

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