The Atlanta Journal-Constitution
U.S.-China tariffs portend more losers than winners
In the brewing trade war between the U.S. and China, the list of losers already outweighs the winners.
President Donald Trump escalated tensions Tuesday, proposing tariffs on a range of Chinese-made products worth about $50 billion with a focus on high-tech items. China wasted no time in firing back with 25 percent tariffs on imports of 106 U.S. products covering everything from soybeans, automobiles and chemicals to aircraft.
Here are some of the businesses affected on both sides of the Pacific:
Loser: America’s Midwest farmers
The Chinese tariffs are a huge blow to American growers, especially those in Midwestern states that Trump needs to win re-election in 2020. China is the biggest buyer of U.S. soybeans, picking up about a third of the entire U.S. crop. The trade is worth about $14 billion. Soybean prices dropped as much as 5.3 percent in Chicago, the most since July 2016.
Winner: South American growers
Brazil and Argentina are the main competitors to U.S. growers in the market for soybeans and corn. They’ll be eager to pick up any lost business, but they won’t be able to completely replace U.S. trade.
Loser: Tech companies with Chinese factories
The U.S. tariffs target the highend technology products made in China. That could mean that companies like Apple and Lenovo Group that operate significant Chinese
production bases face higher costs or supply-chain disruption. The biggest blow by far is to almost $4 billion worth of flat-panel TV screens, according to Bloomberg Intelligence.
Losers: U.S. automakers (including Tesla)
China plans to slap tariffs on most vehicles, including electric cars. Tesla is at particular risk, as it relies on American-made vehicles for all its Chinese sales. Other U.S. carmakers such as General Motors and Ford Motor also manufacture in China. One silver lining: American automakers that import electric vehicle batteries from China were spared the U.S. tariffs. Batteries for items like power tools, watches and smoke alarms were hit instead.
Loser: Boeing
China’s tariffs could hurt sales of some of Boeing’s best-selling planes, such as the 737 family of passenger jets, and put the company at a disadvantage to Airbus SE. China is a crucial market for Boeing.
Winner: U.S. metalworks
The latest round of proposed U.S. tariffs target several specific categories of steel and aluminum made in China. That’s on top of duties announced last month, meaning that some forms of those products will face a 50 percent fee to reach the U.S., further boosting prices for some products.
Loser: Generic-drug makers
Though the U.S. tariffs target Chinese drug makers, those on the losing side may be American pharmaceutical companies that make generics such as Mylan NV. They’ll face having to pay more for raw ingredients, such as insulin used by diabetics and the anti-allergic-reaction drug epinephrine.
Loser: Chinese carnivores
China is by far the world’s biggest buyer of soybeans, which are mostly crushed and fed to pigs. The soy tariffs could ultimately drive up costs for Chinese pig farmers and meat prices for 1.3 billion citizens.