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How the ‘Biggest Trade War in Economic History’ Is Playing Out

How the ‘Biggest Trade War in Economic History’ Is Playing Out


[Read more about how American manufacturers are responding to the prospect of higher costs.]

As of Friday morning, companies like Husco International, a Wisconsin-based manufacturing company that makes parts for companies like Ford, General Motors, Caterpillar and John Deere, now face a 25 percent increase on a variety of parts imported from China. Austin Ramirez, Husco International’s chief executive, said that increase would immediately put him and other American manufacturers at a disadvantage to competitors abroad.

“The people it helps most of all are my competitors in Germany and Japan, who also have large parts of their supply chain in Asia but don’t have these tariffs,” he said.

The Trump administration drafted its initial tariff list to spare consumers, and many of the products that American families purchase from China, like flat-screen TVs and shoes, are not directly hit on Friday. But American companies that depend on Chinese products are expected to feel the pinch, given the tariffs focus heavily on the kind of intermediate inputs and capital equipment that businesses purchase and ultimately sell both in the United States and abroad.

[Read more on how Apple is worried it’ll become collateral damage in a trade war with China.]

Similarly, China has become a key market for brands such as Apple, Nike, Starbucks and General Motors. Consumer boycotts have proven effective in Beijing’s earlier disputes with South Korea, Japan and the Philippines. But targeting American goods could be trickier. The iPhones, Chevrolets and other goods that American companies sell in China are often made in China, and by Chinese workers.

Also, health and hygiene concerns have led China’s increasingly well-off shoppers to prefer food imported from the United States or elsewhere.

Still, some consumers said they could imagine making do without iPhones or American cars as a way to strike back against Washington.

“Of course I want China to fight back,” said Cathy Yuan, 32, who was shopping at an upscale Shanghai supermarket on Friday. “We are defending our rights as a nation.”



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