Exports are essential to the US economy. As a country, we can’t consumer everything we produce. Without the ability to export, we’ll have to produce less, and that means fewer jobs and less overtime — lower income for workers which will reduce their ability to buy stuff we do make. There’s a downward spiral here.
Evidence is pointing to a permanent reduction in US exports if and when the trade wars end. According to the Wall Street Journal,
|America Is Losing the Chinese Shopper|
|Political controversy isn’t the only problem American companies face in China. They are also up against adversaries like Three Squirrels. In just seven years the maker of nuts, seeds and fruits has become one of the country’s most popular snack sellers. Its cartoon squirrel characters have become so popular that there’s now a Three Squirrels theme park under construction and an online show with hundreds of millions of viewers. Its sudden popularity is making it difficult for iconic American snack brands like the Oreo to gain more favor. Even with special flavors like seaweed-flavored Oreos, Oreo Wasabi and Oreo Spicy Chicken Wing. For years, American companies looked to China as a land of new opportunity. Now a new reality is settling in: The Chinese consumer isn’t about to save the day for Western brands.|
We already knew that Russia had opened vast areas to soybean production, to replace US crops going to China with their own.
The trade war is helping the Chinese retool their industries for their consumers. By the time the war ends, we may find that US companies have no markets there at all.