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Today's Pickup: Trump's Increased Trade Tariffs Might Harm The U.S. Economy

FreightWaves

Prior to Trump’s new round of tariffs that were imposed this month on China, Trump’s tariffs were felt on 12 percent of U.S. imports, while only 9 percent of U.S. exports were levied retaliatory tariffs. Though this was a bargain, the recent increase in tariffs on Chinese imports from 10 percent to 25 percent and threatening to double the number of goods on the new tariff list, might actually hurt U.S. interests as it has to contend with fresh retaliatory tariffs on U.S. exports. 

The Congressional Budget Office evaluated the impact of Trump tariffs as of January 2019, and it was estimated to reduce GDP by one-tenth of a percentage point by 2022. But now, with the new tariffs and a complicated trade war in progress, this number could increase to half to one percentage point by 2022.  

Did you know?

The Deloitte Center for Financial Services says in a forecast that availability of industrial real estate will rise from 7 percent in 2018 to 10.3 percent by 2023 as new construction outpaces demand growth in a cooling U.S. economy. 
Quotable

“Over the years, we’ve tested our trucks in a wide variety of cities and environments, from Georgia to California to Arizona, and we’re excited to be back in the Phoenix area to continue learning.”

– Autonomous vehicle driving company Waymo, in a statement on the company resuming testing of robotic semi-trucks on public roads in the Phoenix area. 

In other news

U.S.-EU talks struggle, threatening a new front in trade war

EU elections fragment European parties and thus complicating the course for trade talks (Bloomberg)
Clean hydrogen power can refuel debate for transportation industry

As the global energy transition unfolds, conventional power sources that rely on hydrocarbon-based fuels are gradually relinquishing market share to low and zero emission alternatives. (Forbes)

How the trade war between China and America is changing global business

Alibaba’s experience shows how relations between America and China have soured. (The Economist)

Floods threaten America’s largest oil hub

Major flooding in the Midwest has interfered with crude oil flows from the country’s main storage hub in Cushing, Oklahoma, temporarily pushing prices higher. (Oilprice)

Abercrombie & Fitch CEO says smaller stores are the future

Abercrombie & Fitch is betting smaller stores will fuel its growth and is making changes to 85 Abercrombie and Hollister locations this year. (CNBC)

Final Thoughts

With the trade war between the U.S. and China worsening this month, China might look to weaponize its trade exports by restricting the flow of rare-earth materials from China to the U.S. This would be a problem, as the U.S. relies heavily on Chinese supply of rare-earth materials, which are indispensable in the production of batteries, electric cars, smartphones, and even fighter jets. China is the world’s largest supplier of rare-earth materials, with the U.S. banking on China for 80 percent of its imports. Speculation has been rife on this move ever since Chinese President Xi Jinping visited a rare-earth factory in eastern China last week, along with his top economic advisor, Vice Premier Liu He. 

Image sourced from Pixabay

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