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Trump’s Tariff War Leaves American Companies With No Option But To Compromise

The growing hostile conditions of a trade war between the US under Trump administration and China has not left American companies with much choice. They have to choose between scaling back their dependence on manufacturers based in China or accommodate lower profit margins and relatively higher costs.

Since, there seems to be no end to this trade war in the near future, companies are being forced to rely on lower-cost countries in Asia as well as the Americas for finding alternative suppliers. However, the challenge of finding a nation falling outside the tariff stick of Trump is becoming more and more difficult.

Recently, there has been a sharp tariff spike of 25% on goods from China to 25%, along with threats of imposing an additional tariff on Chinese goods worth $300 billion. This has pushed companies like Canary LLC to consider new suppliers with the aim of avoiding levies as well as preserving profits. Currently, Canary is viewing Mexico as the most feasible near-shore provider when it comes to critical equipment needed for their business of oilfield services.

The decision of the Trump administration to use escalating tariffs in threatening Mexico, in case it does not curb the illegal crossings into the US over the borders, has caused Canary to reconsider their options. For the time being, an agreement reached at the last-minute between Mexico and Trump has brought an end to this trade fight. However, the uncertainty prevails.

Apart from Canary, other industries are also hunting for alternative options of supply chains. They are trying to find ways of avoiding tariffs as well as resisting the dumping of higher price of products on consumers. But the options are limited here as well. Trump has declared a threat to place tariffs on parts and cars that are imported, which can potentially hurt Japanese and European automakers. This leaves US companies relying on supply chains globally in a fix as they wonder if any country is safe.

Malcolm Kimpel
LEAD EDITOR & WRITER At All Industry News

Having a keen interest in the field of Business, Malcolm holds the responsibility of writing news articles and blogs related to business such as mergers, acquisitions, events, and much more. Malcolm is a skilled and experienced professional who puts forth business-related terms and concepts in an understandable and simple manner. Having an interest in political affairs across the world, in free time, he also puts forth his points of view through his personal blog.