The U.S. trade spat with China and other countries is having a negative impact on business decisions and passing on the cost to investors and consumers as a result, the leader of a top trade organization has said.
“What I hear businesses say is that this is having an impact on the decisions they make, on the business decisions they make; that they are not making investment decisions because they fear that the turbulence is too high,” Arancha Gonzalez, executive director of the International Trade Center, told CNBC’s Joumanna Bercetche on Tuesday.
“I hear small businesses saying they have to absorb costs that are going to mean a lot for their bottom line simply because there is no way they can pass this onto consumers and then I hear other companies saying we are passing this onto consumers there’s no way we can absorb this,” she added.
“So all I know is this is negative, negative, negative: negative for business, negative for investors and negative for consumers. And if there was an issue about fairness in international trade, we haven’t yet solved it.”
The Trump administration has engaged in a tense war of both words and action with China, Canada, Mexico and the European Union over the past few months, both threatening and imposing trade tariffs on the basis that existing trade arrangements put the U.S. on an unequal footing.
The U.S. managed to secure a deal with Mexico and Canada to replace the North American Free Trade Agreement (NAFTA) following talks that went down to the wire in late September. However, Washington has not yet settled separate battles with Beijing and Brussels.
On Monday, Bloomberg News reported that President Trump plans to meet with his trade team to discuss a draft report on tariffs for European autos. The president has previously said he thinks the European Union is “almost as bad as China, just smaller.”
Source : CNBC
