Trump’s narrative on the trade war is that he is taking strong and unprecedented actions to stop foreign countries’ unfair trade practices, China in particular. In reality, however, he is actually waging war on corporate America on several fronts.
U.S. House Speaker Nancy Pelosi speaks to the media at the Capitol Building on September 24, 2019 inWashington, D.C. Pelosi announced a formal impeachment inquiry today after allegations that President Donald Trump sought to pressure the president of Ukraine to investigate leading Democratic presidential contender, former Vice President Joe Biden and his son, which was the subject of a reported whistle-blower complaint that the Trump administration has withheld from Congress.
On top of market volatility induced by the trade war, American companies that have significant exposure to U.S.-China trade have seen their market valuations get hammered recently. has shown that negative market reactions have been more severe for listed companies with higher exposure to trade between China and the U.S. in comparison to the market average.
Furthermore, new tariffs imposed by the trade war have fallen disproportionately on America’s imports of intermediary goods, according to. These inputs are needed by American companies to produce for both the domestic and foreign markets. Even for U.S. companies with extensive domestic supply networks, such as General Motors and General Electric, the same research reveals that a high proportion of their domestic suppliers are themselves dependent on imported inputs.
Finally, in August, Trump threatened to force American companies to leave China by invoking the International Emergency Economic Powers Act of 1977 and others like it. This is not an empty threat. Trump could also leverage the government’s massive procurement contracts to pressure U.S. suppliers to stop doing business with China if they want to do business with the government. However, China is now importing almost as much as the U.S.
The trade war has not delivered the results that Trump promised America, and in taking increasingly drastic measures, he ends up waging war on corporate America. With a friend like Trump, corporate America needs no enemies. With luck, the impeachment could bring a lull to Trump’s war on corporate America.... [+]I am the Chief Economics Commentator at Forbes Asia, and a Visiting Scholar at the Lee Kuan Yew School of Public Policy, National University of Singapore. I was the Glob...
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