- Eight months on from the opening salvos of President
Donald Trump’s trade war, and the real world impacts are
starting to be felt across the globe.
- Business Insider took a look at some of the companies
and industries blaming a downturn on the president’s trade
- The world’s largest shipping company, American farmers,
and small manufacturers are among those who have explicitly
blamed tariffs for issues in their businesses.
Eight months on from the opening salvos of President Donald
Trump’s trade war, and the real world impacts are starting to be
felt across the globe.
The US — which the trade war was ostensibly launched to protect —
looks like it is likely to be the worst impacted, with some
forecasters suggesting that as much as 1% could be knocked off
economic growth in the coming years.
On a smaller scale, companies and whole industries are already
starting to feel the pinch from the US imposed tariffs, which
have raised the price of importing a whole range of goods to the
US, increasing costs for the very companies they were designed to
Business Insider decided to take a look at some of the major
businesses and industries that have explicitly blamed the
president’s trade war for a negative impact on their situation.
Shrinking global trade, and hurting shipping companies at the
Maersk, the world’s largest shipping firm, has been particularly
explicit about the threats posed by the tit-for-tat
tariffs between the US and China.
In its third-quarter results announcement earlier in November,
the Danish giant said that global trade is already
feeling the effect.
Global container trade continued to lose momentum in the quarter.
And so far this year it has suffered “a much slower pace of
growth,” rising by 4.2% compared with the 5.8% recorded over the
same period in 2017, Maersk said.
Trade tariffs may end up stifling global container shipping by as
much as 2% in the next two years. The company estimates that
those tariffs make up about 2.6% of the global value of traded
Maersk’s warning was not the first time
shipping giant has weighed in on the trade war. CEO Soren Skou
said in August, before Trump hit
of consumer goods with levies
, that the fallout from
the tariffs “could easily end up being bigger in the US.”
Farmers forced to leave their crops to rot
one of the most striking consequences of the trade war is
what is happening to some farmers in the US.
For many agricultural goods, particularly soybeans, China
is the largest export market for US farmers. That’s changing
thanks to Trump’s tariffs, with Chinese importers looking
elsewhere for a plentiful supply.
China last year accounted for around 60% of US soybean
exports, but such is the lack of demand this year that many
farmers are being forced to leave crops.
Farmers in some US states are being forced into plowing their
crops under — effectively burying them under soil in fields —
as there is not enough room to store them in storage facilities,
and they are unable to sell their products thanks to Chinese
reported last week.
All grain depots and silos are almost full, meaning farmers have
to find their own storage solutions or allow their crops to rot.
Neither option is particularly palatable.
In Louisiana, as much as 15% of this year’s soybean crop
has been plowed under or is too damaged to sell, according to
data analyzed by Louisiana State University staff and cited by
An industry Trump explici
tly says he wants to
help is suffering
Much of Trump’s reasoning behind the trade war is to
reinvigorate the US manufacturing sector, which he said has been
ground down by decades of cheap goods production in the Far East,
particularly in China. Signs are, however, that the tariffs are
doing the opposite, and are actively hurting
Manufacturing activity in the US slowed to a six-month low in
October, with industry figures citing future protectionism
and widespread uncertainty as major reasons for the
“For the consumer, the tariffs are for the most part still
an abstract idea, but for manufacturers they are real, and a big
problem,” said Ian Sheperdson, chief economist at Pantheon
Macroeconomics wrote at the start of November when data from the
Institute for Supply Management (ISM) showed just that.
The ISM, a trade group of purchasing executives, said that
its index of national factory activity dropped 2.1 percentage
points to 57.7 in October from a month earlier. The decline was
largely thanks to uncertainty related to tariffs, according to
“Mounting pressure due to pending tariffs,” observed one
respondent in the ISM survey. “Bracing for delays in material
from China — a rush of orders trying to race tariff
implementation is flooding shipping and customs.”
Such a view is corroborated by analysis from Swiss banking giant
UBS, which argued that many new and smaller manufacturers
could end up being forced into bankruptcy.
“Brand new firms notoriously have very thin margins and a
lack of ability to pass on costs. Small cost shocks tend to cause
large disruptions to new firms. We see some of these new
firms failing,” Seth Carpenter, UBS’ top US-focused economist
said earlier this month.
For instance, Element Electronics, a TV
to lay off 127 workers from its South
Carolina factory as “a result of the new tariffs that were
recently and unexpectedly imposed on many goods imported from
One of America’s most iconic brands is slashing 14,000 jobs
Bill Pugliano/Getty Images
The most recent, and perhaps most acute, example of this is
General Motors’ announcement on Monday that it
will close plants and ax about 14,000 jobs, having
previously warned that Trump’s tariffs may force it to do
The automaker, which employs approximately 110,000 workers, said
on Monday that it plans to cut costs by shutting plants in Ohio
and elsewhere in North America.
Tariffs were not specifically mentioned by the company — at
least not this time. (GM cited “changing market conditions and
customer preferences” among the reasons.) But earlier this year
GM lowered its profit forecasts for 2018, citing higher steel and
aluminium prices caused by new US tariffs.
And in June, GM warned that trade tariffs could lead to job
losses and lower wages, telling the
Commerce Department that higher steel tariffs would impact