Everitt Lawson Group says American consumers could bear the cost of trade war tariffs.
US President Donald Trump may be basking in the glory of his economic successes but many Americans are still struggling to make ends meet and the seemingly upbeat economic situation has done little to improve the position of the average US household. American voters are less than impressed with the supposed triumphs of Trump.
Everitt Lawson Group analysts say the ongoing trade war and resulting trade tariffs could further damage the sentiment of American voters, many of whom will bear the brunt of Trump’s trade policy decisions.
"Although Trump has been very vocal about his belief that the United States is in a better position to negotiate than China, this may not be the case," says Andrew Bale, Head of Corporate Equity at Everitt Lawson Group.
“Americans are already juggling weak wage growth, elevated consumer debt and minimal savings and the cost of tariffs levied in the trade war will likely be passed on to the American consumer,” says Bale.
As little as a 1% reduction in consumer spending, brought on as a result of tariffs, would require a significant increase in exports or business investment in order to offset the impact on US GDP.
“Although the US reported strong GDP expansion in the first quarter of this year, a closer look at the data certainly hints at potential weaknesses in the US economic outlook,” says Everitt Lawson Group’s Head of Corporate Equity, Andrew Bale.