As the Trump Administration’s tariffs bite down, more companies are going to feel the financial crunch. But in the end, they won’t be the biggest losers in a trade war because it may be the consumer who stands to be hit the hardest.
CGTN’s Sean Callebs reports.
All it takes is a quick peek at any port around the world, and you get the idea.
“We live in an interconnected and interdeveloped world,” Charles Skuba, a Georgetown University professor said. “Certainly in the area of supply chains, global supply chains.”
U.S. President Donald Trump is punishing a host of nations, especially China, saying when it comes to trade, the playing field isn’t level.
Skuba says the number is $350 billion. Lopsided, but he believes China wants to work out differences with the U.S. and with good reason.
“In the long run, the big losers of an escalating trade conflict are consumers everywhere,” Skuba said.
Let’s take the iconic iPhone for example: Assembled in China, and obviously imported to the United States. But there are all kinds of parts, that make up this phone – and they truly come from all over.
- The audio chips, come from the UK, China, South Korea, Japan, and Singapore.
- The compass: Japan, the U.S., France, England, China, and South Korea.
- The iPhone camera: more than 20 different nations.
- The glass screen: made in 24 countries.
- And the battery: 80-different nations.
It’s just one example, and the International Monetary Fund is concerned about where this feud is headed.
“Whether you call it trade war or not..it would be very worrisome,” said Maurice Obstfeld, Chief Economist for the IMF. “They say the average automobile manufactured in Michigan crosses the U.S.-Canada border some seven times in the production process,” Skuba said.
Times have changed. Punishing one nation for a trade imbalance may play well to a crowd, but once consumers start feeling the bite in the wallet, they may very well change their tune.