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Internation IA.docx - International Economics Commentary...

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International Economics Commentary Title of the article: Trump’s Tariff Could Kill Thousands of Small Businesses in ChinaSource of article: BloombergSource of the article:  -19/trump-s-china-tariff-may-crack-a-home-depot-lampshade-supplierDate the article was published: March 20, 2017Date the commentary was written: March 23, 2017- March 26, 2017Word count: 747 words
Article:Trump’s Tariff Could Kill Thousands of Small Businesses in ChinaHigher labor costs and stricter regulations keep nudging Eric Li’s glass factory in southeast China toward insolvency, even though his lampshades are on the shelves at Home Depot. President Donald Trump’s threatened tariff on his goods may be the final shove.Three of the four furnaces at Huizhou Baizhan Glass Ltd.’s dusty plant sit dormant, and the workforce making lampshades and vases for export to the U.S. has been slashed to 150 from about 1,000 just a decade ago. Profit margins are shrinking, and Li said the company started by his Taiwanese father in 1991 is hanging by a thread.“If there’s a tariff, it’s game over for us,” said Li, 42. “We don’t have the ability to take on extra costs.”Thousands of small- and medium-sized factories in China face the same predicament, with some owners considering shutting down or selling out if Trump slaps a levy on Chinese products that he said could reach 45 percent. These makers of clothes, toys and household goods fuel the $462.8 billion annual flow of exports to the U.S. but aren’t cash-rich, making it harder for them to take the tariff punch or pivot their operations toward Southeast Asia.“Smaller companies tend to be focused and not diversified like big players are,” said Karel Eloot, a senior partner at McKinsey & Co.in Shanghai. “They would be the most exposed and dependent on whatever happens with U.S import duties.”Trump has accused China of unfair trade practices and currency manipulation, and he pledged as a candidate to address both issues if elected. U.S. Commerce Secretary Wilbur Ross said in a Bloomberg Television interview on March 1 that measures will be announced “as soon as we have a proper case prepared.”The administration’s rhetoric has softened since, with one of Trump’s top economic advisers, Steve Schwarzman, saying the president will likelytemper his criticisms of China.

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Term
Summer
Professor
unknown
Tags
International Trade, United States Trade, States Trade Representative

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