While the trade war led by the USA is heating up more and more, some companies are already starting to feel the consequences of the introduction of higher tariffs, mostly those from the automotive sector, but also others.
China announced on Friday that it will impose tariffs on more than 5.200 US products if the US decides to carry out its latest threat to impose 25 percent tariffs on an additional $200 billion worth of Chinese goods.
At the beginning of the year, the USA introduced tariffs on steel and aluminum imports from the EU, Mexico and Canada, to which those countries responded with retaliatory measures, reminds Hina.
So far, the car industry has been most affected by the escalation of the trade war - three major manufacturers recently warned that changes in trade policies are harming their business.
Ford and General Motors, Fiat Chrysler, BMW
Ford and General Motors cut their 2018 profit forecasts, citing rising steel and aluminum prices caused by US tariffs. Fiat Chrysler also cut its profit forecast for this year after its sales in China fell as customers put off purchases.
Other European and American car companies have already reacted by increasing vehicle prices in China. BMW recently announced that it is raising the price of its two models due to higher import tariffs on American cars in China. Tesla also announced price increases for two models.
However, there is also a positive effect for China, points out Anna-Marie Baisden, lead automotive market researcher at Fitch Solutions. "We've seen several automakers, including Tesla, accelerate plans to invest in local manufacturing facilities to avoid import tariffs," she said.
Companies from other sectors are also considering opportunities. "Ironically, some of the hardest hit firms are American or those that manufacture in the US, even though the US tariffs are intended to help domestic companies recover," Baisden said.
American motorcycle manufacturer Harley-Davidson plans to move part of its production out of the U.S. to avoid the "significant" burden of European tariffs created in response to U.S. tariffs on steel and aluminum.
Food companies and other victims
Some companies in the food and beverage industry are also lowering their forecasts and setting new prices to cope with the new state of affairs.
Tyson Foods, the world's largest meat producer, recently cut its profit forecasts, saying that tariffs on US pork and beef exports had caused an oversupply and a consequent drop in meat prices in the US market.
Coca-Cola said it would raise prices in North America this year to offset higher transportation and metal costs, according to the Wall Street Journal.
Other companies are trying to reduce the volume of business with China as a way to avoid tariffs.
The toy manufacturer Hasbro is moving production from China, the American conglomerate Honeywell wants to use more chains from countries outside China, and the home furnishing company of the Republic of Croatia plans to reduce the amount of goods obtained from China.
The International Monetary Fund has warned that the escalation of tariffs and retaliatory measures could cut global economic growth by 0,5 percent by 2020.
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