Trade war and e-commerce businesses

Trade war

After a very tough election campaign US president Donald Trump won the Presidency and became president of the United States on 20 January 2017. He had promised tough trade restriction to some countries that he said are costing the United States billions of dollars. After entering into office he started what the main stream media calls a trade war against China and other US allies. This trade war seems to be including a lot of countries. There is no doubt that the United States is the largest market in the world in terms of size. Although China and India have a large population their markets are smaller due to low incomes. Many countries who have trade agreements with the United States have taken advantage of these agreements in order to flood the United States with their products. The new US administration has started a trade war with these countries.

How has the United States started a trade war?

The US has started a trade war by imposing metal and steel tax on all imports entering the United States. This is seen as a way to promote the revival of the local steel industry which has been decimated over the years. The United States has also informed members of the NATO agreement to increase military expenditure so that they can help out. The US administration has also introduced other taxes on US allies and neighbors such as Canada, Mexico and Germany.

What does the trade war mean to E-commerce businesses?

There are some e-commerce businesses which thrive on importing certain raw materials or products from other countries. This means in order to access the United States market they will need to move their business to the United States or make their products more expensive.