The ongoing trade war between the US and China has impacted American companies. The heavy taxes slapped on imported steel and aluminum from China by President Donald Trump has been troubling most of the manufacturing industries. Auto companies such as heavy equipment manufacturers like Caterpillar, General Motors and beer maker Anheuser-Busch say the hike in cost of raw materials has increased the input cost.

Michel Hicks, professor of economics at Indiana Ball State University, said no company is going to import goods from China considering the new taxation policy. Trump had already imposed tax on import of steel, aluminum from China last year.

Last month, additional tax was imposed on Chinese goods worth $ 200 billion. American manufacturers have been importing goods and spare parts for years from China. It is almost impossible for companies to uncouple from the global supply chain. If the trade war runs long, the American manufacturers and consumers will be isolated in the global market very soon.

Taxation on Chinese goods

Many companies have started feeling the pressure of this ongoing trade war between the two nations. St Pierre Manufacturing Corp, Massachusetts has been making several steel products, including tire chains, wire ropes for nearly a hundred years. The company in now facing problems due to taxation on Chinese goods.

Many American products are made from the import items. Twenty three percent of Corvette engine and the 43% of Ford Explorer engine are made from raw materials imported from China. These companies have to pay more for the import now.

Budweiser beer and Coca-Cola cans are made from imported aluminum. General Electric imports some parts of its medical equipment from China. Between the trade war, many American manufacturers have begun to import more finished goods from outside. This will affect domestic production and will also impact employment.