While the American media focuses on Donald Trump’s everyday utterances?
His efforts to leverage trade in and out of America and make deals by beating down other countries while throwing away trade deals made by President Obama are slowly and quietly setting off alarm bells ….
Despite dire warnings from economists, President Trump’s trade war has so far done little to derail the decade-long recovery from the Great Recession. Economic growth has remained strong, and the unemployment rate last month hit a 50-year low.
But evidence is mounting that the conflict has taken an economic toll. The Commerce Department said Thursday that trade — both imports and exports — slumped in April, and data released earlier this week showed a sharp slowdown in manufacturing, amplifying a recent trend. The bond market in recent days has been sending signals that the trade war could be a threat to growth in the United States and globally. The impact could deepen if Mr. Trump follows through on his promise, made Thursday, to impose new tariffs on imports from Mexico.
And as the conflict drags on, there are signs it is beginning to reshape the global economy in more fundamental ways.
“There’s definitely lasting damage that has been done,” said Mary Lovely, a Syracuse University economist and senior fellow at the Peterson Institute for International Economics in Washington. “It’s not going to mean the end of the world tomorrow, but it’s death by a thousand cuts. How competitive is America going to be in 10 or 15 years?”
Tariffs have not yet compelled businesses to return large-scale production to the United States, where labor and other costs tend to be much higher than in China and other overseas manufacturing hubs.
But trade tensions are accelerating a corporate trend of shifting supply chains away from China. In a recent survey of more than 200 corporate executives by the consulting firm Bain, 42 percent said they expected to get materials from a different region in the next year, and 25 percent said they were redirecting investments out of China. More companies are likely to follow suit in coming weeks after the Trump administration moved to limit business with Huawei, the Chinese telecommunications giant, which the White House sees as a security threat.
Many companies were initially reluctant to abandon longstanding supplier relationships over a trade dispute that could be over in months, choosing instead to absorb the tariffs or find ways to share the costs with suppliers and customers. Now some are re-evaluating those decisions.
GoPro, the camera maker, said this month that it was shifting some production from China to Mexico. Universal Electronics….
image…ControlTek, which has 140 employees, focuses on quality and service to stay competitive against high-volume Chinese factories.CreditThomas Patterson for The New York Times