Global commerce conflict prompts profit warnings from giants such as Daimler AG
The U.S.-initiated trade dispute has triggered retaliatory reactions from the country's major trading partners, casting a shadow over the business of global multinational firms.
German carmaker Daimler AG is the first major international corporation to issue a profit warning in response to the Trump administration's protectionist "America First" doctrine.
Daimler last month called the global trade conflict and tariffs imposed by U.S. President Donald Trump the "decisive factor" in the reason for lowering the annual forecast.
As a consequence, Daimler now expects its earnings before interest and taxes to decline slightly in 2018 from last year.
It was also reported that BMW has joined Hyundai and General Motors in opposing the Trump administration's plan to impose tariffs on imported cars, and the automakers have written to the U.S. Secretary of Commerce to voice their concerns.
As the United States is where the world's most Fortune 500 companies are based, the country's corporate sector is expected to bear the brunt of escalating trade tension.
The U.S. Chamber of Commerce recently warned that the Trump administration's new tariffs on imports are likely to spark a global trade war, as other trading partners have announced billions of dollars in retaliatory tariffs against American products.
"New tariffs on steel, aluminum, and Chinese imports, as well as the potential for additional tariffs on autos and auto parts, have pushed us to the brink of a global trade war," the U.S. Chamber of Commerce, the largest business group in the country, said in a new study.
The U.S. Chamber of Commerce pointed out that the move will hit American consumers and businesses－including manufacturers, farmers, and technology companies－with higher costs on commonly used products and materials, and as a result, it stands to slow the recent economic resurgence in the U.S..
Some U.S. companies have already been pressured to take action. Motorcycle maker Harley-Davidson announced in late June that it would shift some production of its motorcycles outside the U.S. to avoid retaliatory tariffs imposed by the European Union in response to U.S. tariffs on steel and aluminum imports.
"EU tariffs on Harley-Davidson motorcycles exported from the U.S. have increased from 6 percent to 31 percent," Harley-Davidson said in its filing with the U.S. Securities and Exchange Commission.
A group of almost 60 U.S. business associations, including the National Foreign Trade Council, have urged Congress to exert greater oversight on the Trump administration's use of tariffs and other trade policy measures.
They said escalating tariff threats and the potential of trade wars with U.S. trading partners, including with some of the country's most important allies, create uncertainty that will be felt by Americans across the country and by businesses of all sizes and across all industry sectors.
"Simply put, tariffs are a tax on American consumers and businesses," the U.S. Chamber of Commerce said on its website.
