The United States has the largest economy in the world. However, China also has a massive economy. In 2018, both nations were involved in a substantial trade dispute. The United States accused China of selling steel at low prices. This moved caused various steel companies in the United States to suffer. The United States added tariffs to imported iron from China. After making this move, President Trump also added a tax to all products imported from China.
In response to these moves, China halted agricultural imports from the United States. This move decimated many farmers across the United States. Farming is a complicated business, and many farmers in the United States have record amounts of debt. Once the prices of various crops crashed, some farmers had to sell land to survive.
If the trade conflict ends, many people expect that economic growth will increase. Some business leaders have halted investments until the trade conflict is over. Numerous retail companies have reported that the trade conflict eroded profits. Supply chain issues were also common in 2018.
Many business leaders plan to diversify their manufacturing base. The vast majority of companies only rely on China for manufacturing. There are dozens of nations in Asia that can provide similar products for a lower price.
President Trump has proposed offering financial aid to farmers who were impacted by the trade war. Some people believe that financial aid will not be enough to compensate for all of the monetary damages that farmers have had to endure.
Global economic growth has stalled in 2019. China recently reported the slowest economic growth in nearly a decade. Although economic growth in the United States is robust, the vast majority of nations have a stagnant economy. If the global economy continues to stagnate, 2019 could be a rough year for investors. Many investors are hoping the trade conflict comes to an end.