A Data shows Trump’s U.S-China Trade War hurting the United States

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The U.S President Donald Trump said that Chinese manufacturing would crumble if the country didn’t agree to the trade terms of the United States. Trump’s comments come as newly released data. It shows the U.S-China trade war was eliminating to American shores and hurting the U.S factories that the president has designed to protect. A closely watched index of American manufacturing activity fell to 49.1 from 51.2. It is signaling a contraction in U.S factory activity for the first time since 2016. The American companies were responding to the Institute for Supply Management survey, on which the index is based on. It cited shrinking export orders as a result of the trade dispute. There is also a challenge of moving supply chains out of China to prevent the tariffs.

The struggles of the American manufacturing sector are likely to increase as the 2 largest economies in the world continue to escalate their trade fight. The U.S president placed a new 15% tariff on a range of consumer goods on Sunday. These goods include clothing, lawnmowers, sewing machines, food, and jewelry. Beijing retaliated by increasing tariffs on $75 billion worth of American products. On Monday, China also said that it was filing a complaint at the World Trade Organization over Trump’s new tariffs. Markets have shown a downfall due to weaker economic news and worries regarding the U.S-China trade war. It is noteworthy that the S&P 500 was down about 0.9% with particular weakness in industrial and energy stocks.

The prices of key industrial commodities were also lower with futures prices for benchmark American crude oil down roughly 3%. The chief financial economist at MUFG Union Bank, Chris Rupkey said, “The US trade war with the world has blown open a great big hole in manufacturers’ confidence. The manufacturing sector has officially turned down and is falling for the first time this year as the China tariffs and slowdown in exports has really started to bite”. The U.S president has continued to insist that pain from the trade war is falling primarily on China, not the United States. He said the American companies were leaving China in response to Chinese tariffs. It is a development that put the U.S in an incredible negotiating position.