The U.S. is facing March 1 deadline to reach a trade agreement with China.
The ongoing trade dispute with Chana has already significantly affected farmers as China has imported less U.S. agricultural products, like soybeans, leaving farmers struggling to sell crops and relying more on increased assistance.
If no agreement is reached, it’s possible the parties could delay the deadline, but the U.S. has threatened to significantly increase tariffs – import taxes - on Chinese goods.
That would cause ripples for consumers purchasing products from China as prices of those goods would go up, but could make products manufactured in the Europe, Japan, Canada, Mexico, and in the U.S. more competitive, a potential boost to manufacturing towns and other exporters to the U.S.
The U.K. and EU are in the process of negotiating an exit plan for the U.K., with a March 29 deadline.
The U.K is the fourth-largest importer of U.S. goods and agricultural products, and the uncertainty around Brexit has already hurt these U.S. exporters. If the U.K. doesn’t reach a deal to maintain relatively open trading with the EU, it’s likely its economy could be hurt further, leading to fewer purchases of U.S. goods.
The U.S. is also the largest investor in the U.K., partly due to its access to the EU. Without a deal, many of those U.S. businesses, including companies like equipment manufacturer Caterpillar, which has 16 plants in the U.K. would likely look into the expensive proposition of moving their operations elsewhere.
A new trade deal among the U.S., Canada and Mexico won’t take effect until 2020, but companies are already planning for how the deal’s changes could affect their businesses. For example, car prices may increase as the deal includes higher labor, steel and car part costs for manufacturers, while dairy farmers will be able to sell more products to Canada.
- How are local businesses and employers planning for these possibilities?
- Do local companies import parts or export goods? Will their hard costs or sales prices change? How will bottom lines be affected?
- Do local companies have plants or branches overseas? What changes are they anticipating?
- What items could get more or less expensive for consumers? Will goods be coming from different places than they do now?
- Trace the journey of a car’s production, noting where the parts come from and what parts of the process are likely to change.
- How do pending trade deals affect savers and investors?
- Are financial advisers updating their advice to those saving for retirement or trying to grow investments?
- How should individuals that may be affected by trade deals be planning ahead?
Money Matters personal finance contentNational Endowment for Financial Education