Trade War Winning! Companies Are Leaving China to Avoid the 25% Tariff

It looks like China is losing the trade war and might consider dealing if they think they can’t wait it out.

China’s economy “expanded at the slowest rate in nearly 30 years in the 2nd quarter,” says Axios’ Courtenay Brown, and the reason behind the decline is “heightened U.S.-China trade tensions and weakening trade demand from other fragile economies.”

The Chinese government reported that its second-quarter GDP was just 6.2 percent, a .2 percentage point drop from the previous quarter and “the weakest pace of growth since the government started releasing quarterly data in 1992.”

The trade war is hurting China’s involvement with U.S. companies as well, the Wall Street Journal reports.

“Companies that make Crocs shoes, Yeti beer coolers, Roomba vacuums, and GoPro cameras are producing goods in other countries to avoid U.S. tariffs [on imports] from China,” according to the Wall Street Journal.

Countries like Vietnam, India, Taiwan, and Malaysia are all benefiting from China’s stumbles. The longer this U.S.-China battle drags on, the more manufacturing infrastructure becomes permanent in these other countries.

They may not be returning to the USA but they are leaving China for the long-term or forever. China’s bizarre form of capitalism isn’t all that enlightened if they think their approach will work.

Some believe the Democrats are encouraging them to wait it out but they could come up with this on their own. If they think the President will leave office in 2020, they can wait for Democrats to give them a deal that greatly benefits them. If they decide the President will be in for six more years, they will start to deal.

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