In an attempt to regulate international trade tactics, U.S. President Donald Trump has launched a number of tariffs on overseas goods throughout his presidency. The imposed tariffs have caused retaliatory responses from nations such as China, resulting in the loss of roughly $40 billion worth of exports for U.S. businesses. Here we’ll take a look at some of the companies hit hardest by Trump’s tariffs and ensuing concerns over the trade war’s effect on the U.S. economy.
Harley Davidson has been among the companies which have garnered the most attention in relation to tariff-related difficulties. The iconic motorcycle company’s profit earnings per share were virtually eliminated in the fourth quarter of 2018 as it struggled to keep up with retaliatory tariffs on U.S. motorcycles sold in the EU and China. The company ultimately announced that in order to balance production costs, they planned to move some production overseas by opening a new plant in Thailand. Trump responded by backing a proposed boycott of the motorcycle company’s bikes in an attempt to keep them from taking jobs overseas.
Trump’s steel and aluminum tariffs took a toll on other vehicle production companies as well, with companies such as Ford suffering massive losses. Ford cited anticipation for the upcoming tariffs as the cause of an additional $480 million tacked onto their commodity costs in 2018’s first quarter. In light of the new tariffs, Ford also wiped plans to sell the Focus Active to U.S. drivers due to profitability concerns of overmarketing the Chinese-made vehicles.
Beer and soda companies
Steel and aluminum tariffs are also having an effect on beverage companies which depend on aluminum cans to bottle their products. Molson Coors Brewing Company has expressed concern over the 10% production costs which could cost the company’s bottom line as much as $40 million. The company’s CEO is hesitant to absorb the cost by rising beer prices, due to fear that it could be a turn off to would-be customers. Companies such as Coca-Cola reportedly do not share the same concerns, as CEO James Quincey announced that consumers may see a price hike in the near future.
Trump recently asked China to remove tariffs on U.S. agricultural goods, due to the devastating effect that the trade war has had on American farmers. Many U.S. farmers found themselves without buyers for their crops in 2018 after their traditional Chinese buyers began to pull contracts. In October 2018, North Dakota reported that 12.1 million bushels of soybeans from their 2017 crop where still being held in storage for lack of buyers. Other farmers were forced to slash prices in order to help move their 2017 crops, as room for storage stretched thin.
Walmart and Target
Consumers can expect to see higher prices at popular retailers, such as Walmart and Target in 2019, due to the imposed tariffs. Such companies have come to rely on the sale of Chinese exports, which will now be taxed 25% rather than the traditional 10%. The companies have warned that in order to maintain profitability, they’ll be forced to raise the prices of a variety of goods which consumers regularly purchase from their locations. Matthew Shay, the CEO of the National Retail Federation, remarked in a press release that, “Achieving better trade deals is an important priority, but there is nothing better about it when American families are forced to pay higher prices for everyday purchases.”
As many businesses are forced to either raise prices or absorb the costs offset by the imposed tariffs, concerns run high across a variety of U.S. businesses. An organization known as Republicans Fighting Tariffs has put together a list of over 200 companies which are suffering the effects of the trade war.