Susan Jung |

Tariffs continue to be in the news as China and the United States accuse each other of unreasonable and unfair trade practices. Reports suggest that the US administration is considering adding additional tariffs for all remaining goods imported from China. China has vowed to retaliate.

I am often asked what impact tariffs have on companies that sell products to and from China. According to a recent survey, company executives were asked if tariffs are affecting their business. Both United States executives as well as Chinese executives were interviewed for the survey. Shown below are the three top categories that responded that their business was impacted by tariffs and is causing sales disruption.


There is no doubt tariffs will have an economic impact on both the United States and China. It is our view that this trade war currently underway between the United States and China will likely be resolved next year. In the meantime, the resulting impact on companies both in the United States as well as in China will be significant.

In my recent trip to China, a clear theme emerged from investment strategists and business executives. Virtually without exception the Chinese shared with me that the impact on their business was so significant that they are holding off expansion plans and other business activities. This is having a real impact on the Chinese economy which is why estimates for economic growth are moving lower as estimated by economists.

Companies that rely on trade between the two countries will be affected and we are already starting to see that theme in the latest earnings reports this earnings cycle. In all likelihood, US companies subject to tariffs by the Chinese will also delay expansion plans as they wait for better clarity regarding future business conditions. The result of this action is likely slower economic growth.

Many Republican and Democratic economists share concern that tariffs will negatively impact global and US growth. We will continue to watch and assess trade talks as well as other economic factors. We have already added trade policy and tariffs as an additional input into our investment analysis and decisions. We will adjust as needed.

If you have any questions about this information, do not hesitate to reach out. We are always happy to answer any questions.

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