Tension between the United States and China is not new, but with the return of tariffs pushed by former President Donald Trump, the trade war between the two powers has escalated again. And while leaders talk about protecting domestic industries and balancing the trade balance, many U.S. companies are beginning to feel the effects-and not exactly in a positive way.
While Trump has justified his tariff policies as a way to bring back jobs and strengthen local industry, the reality is that many companies in the U.S. rely, in large part, on Chinese imports. From technology products to clothing to agricultural products, the effects of this trade war are rippling throughout the economy.
Technology Under Pressure
One of the sectors most vulnerable to this war is the technology sector. Giants like Apple and Nvidia are in the eye of the storm.
Apple, for example, manufactures most of its products in China. Although it has received a temporary exemption from some tariffs, that does not mean it is out of the woods. If tariffs continue or increase, production costs will go up, and that could impact both its profits and the prices consumers pay.
The same is true for Nvidia. The company relies on components manufactured in China and Taiwan, especially for its chips and graphics cards. Relocating such a complex supply chain is neither simple, nor cheap. In addition, there are rumors that new restrictions could be imposed for national security reasons, adding further uncertainty to the outlook.
Fashion is Also Getting More Expensive
The world of fashion and footwear is not far behind. Popular brands such as Nike, Levi’s and Gap rely heavily on factories in Asia, especially in China, Vietnam and Indonesia. With new tariffs of 145% on Chinese goods and additional tariffs of 10% in other Asian countries, production costs are skyrocketing.
For brands, this presents a major dilemma: do they absorb the cost or pass it on to customers? In many cases, we are already seeing price increases in basic products such as tennis shoes, jeans and T-shirts. In addition, the shares of these companies have fallen since the new tariffs were announced, reflecting investor concern.
Agriculture: One of the Hardest Hit
Agriculture is one of the sectors that has suffered the most in previous trade disputes, and this time is no exception. China has historically been one of the most important markets for U.S. agricultural products, especially soybeans.
When Trump launched his first trade war in 2018, China responded by buying soybeans from other countries like Brazil, hitting U.S. farmers hard. Now, with Chinese tariffs reaching 125%, the situation could be even worse. According to the Department of Agriculture, there are more than 500,000 soybean farmers in the U.S., and an estimated 223,000 jobs depend directly on this industry.
Organizations such as the American Soybean Association have spoken out, warning that many producers could go out of business if this situation continues. Large companies such as Cargill, Tyson Foods and Archer Daniels Midland are also at risk of losing millions in export revenues.
And What About Medicines?
Another affected sector, although less visible, is pharmaceuticals. Many active ingredients for drugs sold in the U.S. come from China. If tariffs continue to rise, costs for pharmaceuticals will also go up, and patients will likely end up paying more for their medicines. This could directly affect the healthcare system and millions of people who rely on regular treatments.
Transportation and Machinery: Giants Exporting
Companies such as Boeing and Caterpillar, which export heavy machinery and aircraft to China, are also on the list of those most affected. Chinese trade retaliation means that these companies could lose access to one of their most important markets. In such a specialized industry, losing customers can have a huge impact on finances.
Beyond the Companies: The Economic Impact
This trade confrontation is not only affecting large corporations. It also has direct consequences on the U.S. economy. According to a Yale Budget Lab analysis, if tariffs continue, as many as 740,000 people could lose their jobs by the end of 2025.
In addition, by raising production and transportation costs, companies end up raising prices. This fuels inflation, making everyday life more expensive for everyone. From clothing and electronics to food and medicine, consumers could begin to feel the effects of the trade war on their pocketbooks.
And most worrisome: uncertainty. Many businesses don’t know what will happen tomorrow. Tariffs change, negotiations move back and forth, and planning for the long term becomes increasingly difficult.
In short…
The trade war between the U.S. and China is far from being a fight that only affects politicians and diplomats. Its effects are being felt in the factories, in the fields, in the stores and in the homes of millions of people.
Although the intention behind the tariffs is to strengthen the U.S. economy, for now, they seem to be doing more harm than good. As the world’s two greatest powers continue to measure themselves against each other, many businesses – and people – are paying the price.