What the “Trade War” With China MeansSubmitted by Green Financial Group on October 17th, 2019
Clients ask all the time what’s happening with China. Today I would like to put some of your fears about the “trade war” to rest.
Clients continue to ask me what’s going on with China, so today I’d like to put some of your fears about the issue to rest.
Here’s the deal, China takes up too much space in our heads. I often get asked about the trade wars: and what that means. First of all, it’s not a trade “war.” This is not a global trade war. We have agreements in place with Mexico, Canada, many European countries, South Korea, and so on; but we only have a problem with one country—that’s it. So I wouldn’t call it a trade war—more like a trade skirmish with China.
Here’s what’s happening in China: Supply chains are leaving their country. You’ve got companies like Crocs, GoPro, iRobot, among many others that have already left China. China’s economy is being damaged as a result of these companies leaving, and that’s business that isn’t coming back to China anytime soon.
Hopefully, an agreement with China will come about shortly. Here’s why I’m optimistic: We’ve got a presidential election coming up in 2020, and this current administration wants what each one wants—to be reelected. Tariffs aren’t good for anyone; it’s a tax on the American consumer as well. So, I don’t have a crystal ball, but in my opinion, some sort of agreement will come about with China between now and the election. Removing tariffs will help consumers, farmers, United States companies, China’s economy, and the U.S. domestic stock market.
We dislike trade skirmishes, but surely some good will come of this. Don’t worry too much about the skirmish with China, because I believe this will be settled soon.
If you have any questions, concerns, or comments feel free to reach out by phone or email. I would love to speak with you.
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