The US has imposed trade tariffs on more than $250 billion worth of Chinese goods, with China retaliating with their own tariffs on about $110 billion worth of US goods. But what exactly does this mean for US businesses? Here’s a look at the tariff timeline, tariff consequences, the affected industries, and what you can do to prepare.
The tariff timeline
In 2017 the US launched an investigation into Chinese trade policies and in 2018 began imposing tariffs on a variety of Chinese products. Of course, China responded by imposing their own tariffs against the US.
In December of 2018, talks briefly gave hope for a deal to end the creation of new trade tariffs, but no deal was made.
New tariffs were then imposed after negotiations failed in May. New trade negotiations opened up in June. And again no compromise was made. President Trump has stated that new tariffs will go into effect in September of this year, adding additional taxes to Chinese goods coming into the US.
How the tariffs affect imports, exports, and trade
Tariffs are taxes on foreign products. And the idea behind them is that they will force companies to change their decisions about importing and exporting certain goods in order to save money on taxes. It’s never quite as simple as that though.
By forcing companies to buy goods from domestic manufacturers, prices often go up on those goods, costs can then go up for retailers, and thus finished products will likely go up in price for consumers.
And it doesn’t just affect US and Chinese businesses and consumers. When trade wars happen, consequences affects other nations as well, as the BBC explains in this article.
It reduces trade between foreign nations, giving US businesses and consumers fewer options. The pay-off, according to proponents of these tariffs, is a boost in the US economy. Unfortunately, the US economy is primarily service-based, not manufacturing-based, and tariffs on physical goods do little to boost the service sector.
Which industries are affected?
A variety of different businesses are affected by this trade war, from small to medium sized businesses, retailers, and e-commerce merchants and fulfillers.
Specific products that are affected by US tariffs include many retail items from China, such as toys, phones, and handbags, and as well as bigger items like railway equipment. CNN reports on some of the affected goods in this article. Even chemical manufacturers, coal, and medical equipment industries in the US are affected by this trade war.
How you can prepare
As costs go up for importing and exporting goods, you can mitigate your increase in business losses by working with modern, affordable drayage service providers like Opus9. We have transparent drayage pricing for major US ports, and highly qualified carriers to service your needs.
Learn more about our Drayage services.