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Fed: Business delays investments because of the trade conflict

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The US companies have reduced or postponed their investments in several regions of the United States because of concerns about tensions in international trade, according to a report from the Federal Reserve. The US Central Bank has indicated in the periodical “Beige Book”, which is based on the 12 regional Fed branches, that the effect of the duties appears to be moderate, although they raise production costs.

The report describes the concerns of US companies for Donald Trump’s trade war with China, as well as growing tensions with Washington’s other major trading partners.

Most regions have concerns and uncertainties about trade pressure – not just among manufacturers. According to the Fed, in several regions, companies specify that they reduce or postpone investments because of concerns about trade.

The US President Donald Trump has imposed duties on imports to a number of trading partners, including China and the EU, Canada and Mexico, which has led to counter-measures against US exports. Despite the trade strain, Fed notes that the economy is growing at a moderate pace.

The companies report shortages of construction workers, truck drivers and engineers for several years. Recently, however, some regions have a shortage of low-skilled workers in restaurants, retail chains and etc.

Meanwhile, another study shows that US companies in China are affected by the trade war between Washington and Beijing.

Two-thirds of US companies in China say they are affected by the trade war. They called for the resumption of the trade talks. In addition, the US companies say they will suffer if Trump implements his plan to impose duties on whole Chinese imports, according to the US Chambers of Commerce in China.

American companies are suffering both from Chinese counterparts and, ironically, from the US duties aimed at undermining the Chinese economy.