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China agreement will not help US manufacturers


 Subject
 The impact of the US-China trade wars on US manufacturers.
 
 
 Significance
 The United States and China reached a tentative agreement in trade negotiations on October 11 that President Donald Trump described as "a substantial phase one deal". The deal, which is yet to be finalised, centres on China's agreement to purchase some 40-50 billion dollars' worth of additional US agricultural goods annually, and Trump's agreement to suspend a planned increase in tariffs on 250 billion dollars' worth of Chinese goods, from 25% to 30%, that was due to take effect tomorrow. However, existing tariffs on both sides remain in place.
 
 
 Impacts
 A manufacturing recession could lead to greater upper Midwest voters’ discontent.
 Midwestern voter discontent could help a Democrat win the presidency in 2020, and a populist win the party’s nomination.
 US-based manufacturers could benefit from new contracts as supply lines are revised, but costs would rise.
 A second Trump tax cut in 2020 could temporarily help US-based firms avoid competitiveness gaps.
