Count unintended consequences and shifting business decisions as casualties in the U.S. trade war with China.
| | | Side Skirmishes in China Trade War | | Count unintended consequences and shifting business decisions as casualties in the U.S. trade war with China. An article in the Los Angeles Times published this past Sunday zeroed in on the Los Angeles area ports. We have written before about how many importers tried to rush their goods to U.S. shores before each tranche of tariffs went into force. The Times' article points out that this has caused import traffic jams at the ports and unexpected costs related to delays. | | Then we got word about "Made in Vietnam" labels being substituted on goods made in China. This is clearly to avoid current and future tariffs. From a broader perspective, Vietnam has benefited greatly from the trade tensions with China. | | Even prior to these tensions, in the last few years, large companies such as Ikea and Nike started to redirect parts of their supply chain to Vietnam, lured by the low labor costs and strong government support for industry. The current industrial environment in Vietnam mirrors that of China over 20 years ago. Now as China takes a big loss as a result of the trade war, Vietnam emerges as one of the leading beneficiaries of this "trade diversion," jumping from 12th in U.S. imports in 2018 to seventh in the first quarter of this year. | | Watch the video | | If we can help you with any Foreign Exchange needs, please email foreignexchange@cnb.com or call (800) 447‑4133. | | Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos! | | | | | | | Follow City National Bank on social media: | | | | | | Non-deposit investment products: | | • | Are not FDIC insured, | | • | Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and | | • | Are subject to investment risks, including possible loss of the principal invested. | | | | | This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. City National Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting. | | | | | | |
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