Daily Management Review

Trump tariffs are damaging domestic business in the US


09/28/2018


Heads of some international corporations said that Donald Trump's tariff policy had already begun to negatively affect their business. According to Ford CEO Jim Hackett, his company's profits will decrease by $ 1 billion due to additional duties on the import of steel products in the US. BP CEO Bob Dudley said that his company's costs have already grown by $ 100 million.



pixabay
pixabay
Ford CEO Jim Hackett told Bloomberg that thanks to additional import duties on Chinese imports to the US, his company "lost $ 1 billion in profits" against the background of rising prices and costs for steel products in the US. "Metallurgical tariffs deprived us of a profit of about $ 1 billion," the top manager said. "The irony is that we already use most of the sources in the United States." In this case, according to Mr. Hackett, the damage to business will only grow: "If all this continues, the damage will be even greater."

Ford reduced its profit forecast for the year already in July, from $ 1.5 per share to $ 1.3. The company's CFO then explained that "the regulatory situation is becoming increasingly uncertain, which has an adverse impact on the business, for example, in the area of rising raw material costs due to the effects of new tariffs."

The tariff policy of Donald Trump is harmful not only to companies whose activities are directly related to metallurgical products. British oil and gas company BP also noted growth of its costs. In an interview with Bloomberg, CEO of the British company Bob Dudley said that "we see that steel is becoming more expensive. Our spending in the US has grown by $ 100 million because of this."

Not only industrial companies are complaining about consequences of the tariffs. In early September, the largest retail network of the United States, Wal-Mart, sent a letter to the Office of the US Trade Mission, expressing concerns about the growth of retail prices for US consumers due to new import tariffs. "Many US manufacturers supply part of their products and components from China to arrange final production or assembly in the US... We have already received information from many American manufacturers around the country that the tariffs on these components will negatively affect our competitiveness and workplaces in USA. For example, fans that are assembled in the US by our supplier, Lasko, use engines and other parts imported from China at facilities in Texas and Tennessee. The introduction of tariffs on components and intermediate goods reduces the whole sense of the president's stated goals of increasing the labor and manufacturing market in the United States."

In mid-September, the National Federation of Retail Market Participants (NRF) issued a statement in which it said that "the new tariffs are resulting in increased risks for US consumers themselves." "After the next introduction of new tariffs, many hard-working Americans will feel this, when they see an increase in their expenses when going to the store and increasing the burden on their budget," the Federation said in a statement. "Even discussion of new tariffs on the rest of imports from China leads to serious concerns among retailers and can affect every aspect of American life. Of course, achievement of more profitable trade agreements remains one of the most important priorities, but nothing can justify the situation when American families are forced to pay more when buying everyday goods," the NRF summed up.

source: bloomberg.com






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