Trump’s tariffs will come back to haunt him

“As the trade war between the US and China ramps up and President Trump continues to threaten to impose tariffs on imported products from China, businesses across all industries are naturally starting to feel nervous about the implications of such a move. Tariffs will no doubt lead to a multitude of complications across import, manufacturing and retail sectors and the effects will be felt by many.”

“The latest development in the tariff debate has seen China attempt to calm the waters by offering to buy US goods to the tune of $70bn over the next year if the tariffs are called off, so a resolution may be on the horizon. It seems inevitable that at some point, Trump will have to back down and come back to the table to discuss the issue further, even if it’s not immediately.”

“If the Chinese tariffs are imposed, costs of goods in the USA will increase and, although the consequences won’t be apparent immediately, within 12-18 months, the landscape will change, consumers will start to see the prices rise and there will be unrest and backlash.”

“The fact remains that no country is self-sufficient and the isolation of any nation, whether physical or in terms of trade, is a dangerous proposition. China itself is too large and too successful to be isolated; it makes too much and we buy too much of it for it to be effectively cut off. Even if the US administration does go ahead with its plans, other nations will no doubt take advantage of the low costs, better pricing and widespread manufacturing capabilities that China offers. This in turn will drive the success and popularity of other low-cost regions, and effectively, the US itself will become the isolated nation as countries start to shift their focus elsewhere.”

“As an EMS, the benefits that China offers in terms of manufacturing and sourcing electronic components are too extensive to ignore. We opened our new sourcing office in Shenzhen in January and already, our customers are benefitting from the higher volumes and lower costs of component parts thanks to the access to China’s pricing structures we can now offer.”

“With regards to the future, I’m sure the situation will produce some fireworks for some time to come, as political tensions rumble on and industry faces the consequences of decisions made by the US leadership. But I’m also confident that it will normalise and calm down over time. Probably via a change in that very leadership….”