Trade War Might Crush California’s Economy Of More Than $2.7 Trillion

Trade War Might Crush California’s Economy Of More Than $2.7 Trillion

Business

The geopolitical situations have never brought any good news for the USA in the past also. But as of now, Trump is trying to do the same, and it’s worrying many economists. Trump administration has recently made the situation more difficult with the introduction of more than 25% of taxes on Chinese goods and services. The US economy is highly dependent on Chinese goods since many big companies here resell those things. There are many states in the USA which are on the verge of getting into recession, but it seems like California might that state which is going to lose the most amount of money.

California’s economy is dependent upon tech, retail and manufacturing sector because of which state makes a trade of more than $175 billion with China. Since tariffs rates have increased by trump administration, it’s getting hard for California based companies to trade with Chinese companies. Now a report of analysts has predicted that if things don’t get resolved in time, then this trade war is going to crush California’s whopping economy of more than $2.7 trillion. According to the US Commerce Department, California’s economy grew at 3.5% in 2018, which is a stunning number.

However, since this trade war has started, California’s economy managed to grow at 2% and experts are saying that this number would go down again if things don’t get resolved quickly. At the Port of Oakland in California, it’s been found that agricultural exports to China have fallen by roughly 13%. Mostly from California, electronics and computer products get exported to China but since the tariffs rates have sky-rocketed exporters are not able to make any profit from these products. The agricultural sector is still performing well since they are finding other options than China, but that’s not a permanent solution to this problem.

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