…evidence is mounting that the conflict has taken an economic toll. The Commerce Department said Thursday that trade — both imports and exports — slumped in April, and data released earlier this week showed a sharp slowdown in manufacturing, amplifying a recent trend. The bond market in recent days has been sending signals that the trade war could be a threat to growth in the United States and globally. The impact could deepen if Mr. Trump follows through on his promise, made Thursday, to impose new tariffs on imports from Mexico.
And as the conflict drags on, there are signs it is beginning to reshape the global economy in more fundamental ways.
“There’s definitely lasting damage that has been done,” said Mary Lovely, a Syracuse University economist and senior fellow at the Peterson Institute for International Economics in Washington. “It’s not going to mean the end of the world tomorrow, but it’s death by a thousand cuts. How competitive is America going to be in 10 or 15 years?”
Tariffs have not yet compelled businesses to return large-scale production to the United States, where labor and other costs tend to be much higher than in China and other overseas manufacturing hubs.
But trade tensions are accelerating a corporate trend of shifting supply chains away from China. In a recent survey of more than 200 corporate executives by the consulting firm Bain, 42 percent said they expected to get materials from a different region in the next year, and 25 percent said they were redirecting investments out of China.
When the trade war first broke out, manufacturers mostly tried to ride it out. But as it drags on — and shows no signs of going away — they are being forced to make more lasting changes to their businesses.https://t.co/qUHLvsVfzI
— Ben Casselman (@bencasselman) May 30, 2019