GUIDANCE

U.S. Firms Caught in the Crossfire in Trade War with China

Jun 20, 2018 | 13:58 GMT

U.S. Secretary of State Mike Pompeo (L) shakes hands with Chinese President Xi Jinping during a meeting at the Great Hall of the People on June 14 in Beijing.

U.S. Secretary of State Mike Pompeo (L) shakes hands with Chinese President Xi Jinping during a meeting on June 14 in Beijing. China might not impose more tariffs on the United States in response to the White House's actions, but its alternate methods could still have a big impact on U.S. exporters and consumers.

(FRED DUFOUR-POOL/Getty Images)

Highlights

China will retaliate against the United States' latest trade threats, but the country is likely to pursue informal measures such as boycotts against U.S. firms rather than impose new tariffs.
Beijing could turn a cold shoulder to U.S. agricultural, automotive, energy and other exporters in favor of doing business with companies from other countries.
U.S. firms that are already doing business in China could find themselves targeted with anti-corruption probes and other bureaucratic procedures as part of Beijing's response.

The United States has fired new salvoes in its dispute with China, but the latest blow is unlikely to be the last in a rapidly developing trade war. On June 18, the White House announced that President Donald Trump had directed the U.S. Treasury to identify a list of imports from China worth $200 billion for subjection to a 10 percent tariff. Trump could be using the threats as leverage in trade talks, but the latest actions are pushing the United States and China closer toward a trade war -- which would have deep, economic ramifications for industry and consumers alike....

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