Companies 'very jittery' about trade situation: Eric Cantor
Former Republican House majority leader Eric Cantor on Monday told FOX Business that the business community is extremely worried about the ongoing trade tiff between the U.S. and China.
“I think for some time now people that I speak to that are running these multi-national companies have been very jittery about where this trade situation is going to go,” he told Neil Cavuto, adding that “I do think you are beginning to see after now the talks have not produced anything people are realizing, hey, there may be a real downside to this.”
Cantor said the tariffs on Chinese goods, which kicks on Sept. 1 would likely hit U.S. consumers.
“I think you go back to fundamentally, is the trade deficit the thing that we ought to be focused on? Because we all know there is another side to the ledger here. There’s foreign direct investment. There is capital inflows that allow us to, as an economy, to go and purchase the things that we do abroad,” he said.
“But I think that you also have to look at if the argument is that somehow with the lower value in the yuan that tariffs really make no difference, that the American consumer will pay the same. I think that does also then bring you back to the point of contract with that the retailers here have with the Chinese manufacturers, so it may not be that they are necessarily benefitting from a lower yuan value and then I think what we are going to see is come Sept. 1 if these and when these tariffs go into effect, and then all the Christmas season merchandise starts hitting the shelves in the fall – that’s when I think we maybe begin seeing the effect on the consumer," he explained.
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Cantor added that the situation with China could also have a “ripple effect” on the U.S. economy.
“You can’t sit here and think that we are going to go in and necessarily have a win-win on all sides because yes bilaterally with China if all things were equal elsewhere, you could see if the yuan went down in value, we don’t really disproportionally export that much to China, we import more, it could benefit us,” he said.
“But remember there is a world going on around us, and so as the dollar gets stronger we become less competitive in terms of our exports and we know and this is why the president is off tweeting about a strong dollar being detrimental to our export industry – that could ultimately cost us economic growth and jobs as well,” Cantor added.