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    Analysis

    February 15, 2019

    Final Thoughts

    Written by John Packard

    It’s time to start thinking (and planning) for what you, your family and your company are going to do should the United States and China fail to reach a trade agreement. The Trump administration has threatened to impose 25 percent tariffs on $250 billion worth of products produced by Chinese factories. So far, President Trump has followed through on his threats and promises, so we have to assume he will do so again this time. The media is beginning to report some of the potential fallout for American companies and probably even more importantly for the American consumer.

    John Packard Summit 18Right now, these products have a 10 percent tariff on them, and most of the companies have absorbed the tax and not passed it on to the customers. It will not be so easy to pass on a 25 percent tariff, which is essentially a tax on American companies that bring in material from China. This includes American-owned companies like that of my neighbor here in Florida who has a company making heating equipment used on the sidelines of most outdoor stadiums around the world. They currently are absorbing the 10 percent tariff, and they are betting the farm that the 25 percent tariffs will not be in effect when they need to replenish their inventories come June 2019.

    John Packard

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