Escalating Trade War with China Could Put U.S. Companies at Risk

The brewing trade war between the United States and China is showing no signs of slowing down, putting many U.S. companies at risk. Over the past week, the two countries have seen tensions escalate as more tariffs are announced on each side. As the dust settles, experts believe it will be interesting to see which country has more at stake in the growing conflict. China faces greater challenges in the goods sector, as it ships over $500 billion in products to the U.S. annually, as opposed to only $130 billion in products shipped to China from the U.S. However, although the U.S. would likely win the battle of material products, the Chinese have the upper hand when it comes to travel and hitting U.S. companies looking to expand and grow their business on Chinese soil.

The Chinese spend a dizzying amount of money on travel to the U.S., including a significant amount directed toward U.S. college and universities for educational expenses. Those costs are not reciprocated by the U.S., putting the U.S. more at risk of loss in this category. Chinese officials can also make it more difficult for U.S. corporations to expand and operate in China, which would greatly hinder the development of many American companies. As evident when examining past relations with South Korea, the Chinese have not shied away from flexing their trade dollar muscles when imposing sanctions on tourism and toward foreign companies operating on their turf.

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