Uncertainty lingers, tensions rise in US and China Tariff War After Trump Tweets

Despite the President of the United States of America not having the executive power to enforce tariff changes without contestation – his words are affecting the market industry wide as the proposed changes are on the horizon.

Further tweets last night added more turbulence. Citing a burden to taxpayers across the country he stated the following:

  • Starting on October 1st, the 250 BILLION DOLLARS of goods and products from China, currently being taxed at 25%, will be taxed at 30%
  • The remaining 300 BILLION DOLLARS of goods and products from China, that was being taxed from September 1st at 10%, will now be taxed at 15%

As Jon Sala-Ferrandiz, President and Unilogic partner, pointed out, “these escalation of threats in the ongoing tariff war have created a climate of uncertainty and skepticism that first provoked an avalanche of Chinese imports into the US, hoping to avoid or minimize the tariff increase effect, that sky-rocketed
the demand for warehouse space across the country.”

The market saw an immediate effect as it suffered drops for its fourth week in a row and had all three indexes dropping at once:

  • The Dow finished went down 2.4%/623 points.
  • The S&P 500 finished 2.6% lower.
  • The Nasdaq Composite finished down 3%.

Per CNN, the industries most affected will be:

  • The auto industry: The tariffs will likely hurt companies sending US made vehicles to China.
  • American businesses: The tariffs will likely hurt American businesses that export to China.
  • Farmers: US-grown soybean farmers will likely be hurt as exports to China have essentially stopped since the last round of tariffs.

More uncertainty still lingers as the fear of further escalation in the tariff war between the US and China continues. Unilogic, a connecting point between our Chinese and American partners, is adamant in reminding everyone that we are here to help you navigate this international political storm by offering a diverse supply chain/consulting service that will help mitigate time and financial attrition by providing options that offer efficiency across the board.

Flexport’s Chief Economist Dr. Phil Levy says, “Two key questions are whether President Trump will then continue to hike tariffs (especially on List 4 items) and whether Congress will take any action.” Only time will tell.

The President’s Twitter comments can be seen here:

https://twitter.com/realdonaldtrump/status/1165005927864512512?s=21