Tariffs Hurt

By Isaac Cohen*

There are indications that the protectionist tariffs imposed in the trade confrontation with China are starting to slow down the US economy. Two recently revealed indicators show the damage caused in the manufacturing sector by these protectionist measures. The Institute of Supply Management manufacturing index showed a contraction by falling under 50 percent, from 59.5 percent a year ago, to 49.1 in August, the lowest since.2016. Additionally, in August, job creation in US manufacturing amounted to 3,000 new jobs, down from only 4,000 in July, while mining and logging lost 5,000 jobs, after three consecutive months of losses.

More pernicious are the consequences of the trade confrontation, on long term manufacturing activity. For instance, the heavy machinery producing company John Deere, quoted in The Wall Street Journal (09/04/19) said many farmers are postponing major equipment purchases.

Similar damages are present throughout the world economy. For instance, in China the government revealed, in July, growth in manufacturing of 4.8 percent from the previous year, the lowest rate in 17 years. There is also evidence China’s imports have declined. South Korea recognized, last week, that its exports to China in August fell 21.3 percent.

Therefore, in trade wars contenders never win, except some bystanders, such as Australia’s 30 percent increase in exports to China. Since last year, exports of Australian iron ore and coal have soared, due to increased demand from construction spending to stimulate the Chinese economy.

*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.

About Ramón Jiménez

Ramón Jiménez, Managing Editor de MetroLatinoUSA.Com (MLN). Graduado de la Escuela de Periodismo de la Universidad del Distrito de Columbia (UDC). Email: [email protected]

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