Rising trade tension casts shadow on multinational firms
The US-initiated trade dispute has triggered retaliatory reactions from the country's major trading partners, casting a shadow over the business of global multinational firms.
German car maker Daimler AG is the first major international corporation to issue a profit warning in response to the Trump administration's protectionist "America First" doctrine.
Daimler last month called the global trade conflict and tariffs imposed by US President Donald Trump the "decisive factor" in the reason for lowering the annual forecast. As a consequence, Daimler now expects its earnings before interest and taxes to decline slightly in 2018 from last year.
It was also reported that BMW has joined Hyundai and General Motors in opposing the Trump administration's plan to impose tariffs on imported cars, and the automakers have written to the Secretary of Commerce to voice their concerns.
As the country where the world's most Fortune 500 companies are based, the United States is expected to bear the brunt of escalating trade tension in its corporate sector.
The US Chamber of Commerce on Monday warned that the Trump administration's new tariffs on imports are likely to spark a global trade war, as other trading partners have announced billions of dollars in retaliatory tariffs against American products.
"New tariffs on steel, aluminum, and Chinese imports, as well as the potential for additional tariffs on autos and auto parts, have pushed us to the brink of a global trade war," the US Chamber of Commerce, the largest business group in the country, said in a new study.
The US Chamber of Commerce pointed out that the move will hit American consumers and businesses -- including manufacturers, farmers, and technology companies -- with higher costs on commonly used products and materials, and as a result, it stands to slow the recent economic resurgence in the United States.
Some US companies have already been pressured to take action. Motorcycle maker Harley-Davidson announced in late June that it would shift some production of its motorcycles outside the United Sates to avoid retaliatory tariffs imposed by the European Union in response to US tariffs on steel and aluminum imports.
"EU tariffs on Harley-Davidson motorcycles exported from the US have increased from 6 percent to 31 percent," Harley-Davidson said in its filing with the US Securities and Exchange Commission.
A group of almost 60 US business associations, including the National Foreign Trade Council, have urged Congress to exert greater oversight on the Trump administration's use of tariffs and other trade policy measures.
They pointed out that escalating tariff threats and the potential of trade wars with US trading partners, including with some of the country's most important allies, create uncertainty that will be felt by Americans across the country and by businesses of all sizes and across all industry sectors.
"Simply put, tariffs are a tax on American consumers and businesses," the US Chamber of Commerce said on its website.