US manufacturing sector booms despite trade war fears

The manufacturing sector added 36,000 jobs in June, the most in so far this year, even as fears grow that President Trump’s trade war with China, Europe, and other nations could undermine those gains.

The Trump administration on Friday imposed new tariffs on $34 billion worth of Chinese goods. The Office of the United States Trade Representative is considering an additional $14 billion and Trump has threatened to increase that amount by as much as $500 billion.

China has pledged to impose dollar-for-dollar retaliatory tariffs. The country’s Ministry of Commerce on Friday said the new duties violate World Trade Organization rules and mark the start of “the largest trade war in economic history to date.”

The manufacturing industry has been booming since the Republican-only backed tax law went into effect at the start of this year. Capital spending is spiking as companies take advantage of a provision in the law that lets businesses deduct the full cost of non-real estate assets from their reported income.

But concerns over the Trump administration’s trade actions are chilling those investments, as businesses forgo major purchases in the midst of an escalating trade war between the U.S. and is trading partners.

The National Association of Manufacturers on Friday warned that the new tariffs “will not solve the existing problems in China.”

“Tariffs will bring retaliation and possibly more tariffs. No one wins in a trade war, and it is America’s manufacturing workers and working families who will bear the brunt of continued tariffs,” Chief Executive Officer Jay Timmons said in a statement. “Manufacturers want to see the administration get China back to the negotiating table as soon as possible in order to pursue a trade agreement that will redefine the U.S.–China economic relationship for the better.”

Other business groups are also accelerating their opposition to Trump’s trade agenda. The Chamber of Commerce on Monday launched an opposition campaign and Harley Davidson previously announced it would shift some U.S. production overseas to avoid retaliatory tariffs from the European Union.

Source

https://www.washingtonexaminer.com/business/us-manufacturing-sector-booms-despite-trade-war-fears