Trade War Update: US Companies Raise Concerns Over Increasing Costs Due to Tariff Hikes - Forex News by FX Leaders
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Trade War Update: US Companies Raise Concerns Over Increasing Costs Due to Tariff Hikes

Posted Tuesday, June 18, 2019 by
Arslan Butt • 1 min read

On the very first day of testimony on Trump’s plan for additional tariffs of 25% on $300 billion worth of Chinese goods, several companies stated that this move could increase costs of products.

If the US continues to hike tariffs on Chinese imports, US companies will have to start looking for alternate markets to manufacture and source their products from. However, this is an expensive proposition requiring significant investment in terms of costs, time and labor, and could drive up the cost of products.

Then there is the lack of viable options. For instance, even if companies wish to switch to manufacturing in countries like Vietnam, unavailability of adequate skills and infrastructure are preventing companies from moving out of China. In addition, manufacturing costs are also higher in other markets like Vietnam and Mexico. Either way, it won’t be possible for companies to maintain existing costs of products without affecting their earnings and revenues.

The next list of goods that could be hit with tariff hikes as soon as July 2 includes almost all consumer products, such as apparel, footwear, electronics, toys, and more.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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