More than four out of every 10 – or 43 per cent – of Fortune 500 companies have expressed concern in recent months about US President Donald Trump’s aggressive and unpredictable tariffs war with China, according to a report released by the US Chamber of Commerce on Friday.
That number has increased from 30 per cent at the beginning of the year.
Fortune 500 companies are large American firms that account for about two-thirds of the United States’ GDP.
Executives with as many as 139 of the companies that raised concerns specifically discussed the impact of tariffs and trade policy tensions on their businesses in earnings calls between June 1 and August 24, the Chamber found.
Federal Reserve Chairman Jerome Powell said on Friday that the trade war between China and the US is weighing down companies’ investment decisions.
“I think it is the case that uncertainty around trade policy is causing some companies to hold back now on investment,” Powell said in Switzerland at the University of Zurich, in a speech about the US economic outlook and interest-rate policy.
“We’ve been hearing quite a bit about uncertainty. So for businesses, to particularly make longer-term investments in plants or equipment or software, they want some certainty that the demand will be there.”
The analysis by the Chamber of Commerce, the largest US business lobby group, showed manufacturing and industrial firms were among the companies most unnerved by Trump’s tariff strategy, followed by retailers and technology firms.
“Tariffs imposed on imports from our biggest trading partners, especially China, may be reaching a tipping point where they have a serious impact on companies, consumers, and the wider economy,” wrote the report’s author, Thaddeus Swanek.
Before Friday’s report, the Chamber had called on the Trump administration to end the tariff battle.
“For the Trump administration’s part, the escalation of trade tensions with China must come to an end,” Chamber chief executive Tom Donohue wrote in The Washington Post last week.
Just this past Sunday, new tariffs on US$125 billion of Chinese goods, including shoes and smartwatches, took effect after the president said he was disappointed in China’s tepid effort to buy US farm goods.
Though both the US and China have announced this week that trade talks will resume in early October, a swift deal to end the hostilities is unlikely, many analysts and watchers have said.
Without a trade agreement, the US is on track to increase tariffs on US$250 billion of Chinese imports next month.
Another round of 15 per cent tariffs is scheduled for mid-December. That would bring the total amount of goods under punitive tariffs to US$550 billion, effectively the entirety of China’s imports to the US.
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