U.S., Canada and Mexico business leaders say tariffs erode business expansion

By Andrea Shalal WASHINGTON (Reuters) - International tariffs are putting the brakes on business expansion, posing a bigger hurdle than tax barriers, the cost of transporting goods or compliance with local rules, according to a survey of 1,500 U.S., Mexican and Canadian business leaders. Fifty-three percent of those polled by TMF Group, an Amsterdam-based professional services firm, saw tariffs as the biggest factor hindering business expansion. Forty-seven percent of U.S

Reuters September 24, 2019 04:08:18 IST
U.S., Canada and Mexico business leaders say tariffs erode business expansion

US Canada and Mexico business leaders say tariffs erode business expansion

By Andrea Shalal

WASHINGTON (Reuters) - International tariffs are putting the brakes on business expansion, posing a bigger hurdle than tax barriers, the cost of transporting goods or compliance with local rules, according to a survey of 1,500 U.S., Mexican and Canadian business leaders.

Fifty-three percent of those polled by TMF Group, an Amsterdam-based professional services firm, saw tariffs as the biggest factor hindering business expansion.

Forty-seven percent of U.S. business leaders said Mexico would be the most important trading partner for U.S. companies over the next five years, compared to just 29% who saw China in that role, the survey showed.

Mexican business leaders, by contrast, were more bullish on China, with 64% listing it as their main trading partner in the next five years, just ahead of the United States with 63%. No comparison figures were available since the survey was not conducted last year.

Mark Weil, chief executive officer of TMF Group, said the survey clearly reflected heightened concerns about the U.S.-China trade war, now in its second year, with depressed business sentiment and uncertainty weighing on investment decisions.

But he said it was too soon to forecast a lasting decoupling of the U.S. and Chinese economies, the two largest in the world.

"There's quite a lot of noise around it, but is it long-lasting?" he told Reuters. "It's driven by policy decisions that can be changed."

The International Monetary Fund forecasts that tariffs already imposed or planned by the United States and China will shave 0.8% off global economic output in 2020.

NORTH AMERICAN TRADE DEAL

Nearly 70% of the business leaders surveyed expect a new U.S.-Mexico-Canada (USMCA) trade agreement to be ratified by all three countries, with that number jumping to 88% in Mexico - the sole country whose legislature has ratified thus far.

The countries signed the agreement last year, but it must be ratified by the legislatures of all three to take effect.

Fifty-seven percent of the business leaders surveyed expect USMCA to have a positive economic effect on their countries, and 61% expected more foreign companies to invest in their markets if the deal is quickly ratified, the TMF survey showed.

Weil said North America was one of the biggest free trade areas in the world, and ratification of USMCA would have huge ramifications for all three countries and the world as a whole.

But he warned against complacency.

"The key is not to sit and passively watch the political process unfold," Weil said. "Even with a deal, firms wishing to export or invest will face complexities, so it is wise to begin contingency planning now for both scenarios: ratification and failure."

(Reporting by Andrea Shalal; Editing by Tom Brown)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Snow-struck Madrid struggles with cleanup as severe frost grips Spain
World

Snow-struck Madrid struggles with cleanup as severe frost grips Spain

By Elena Rodriguez and Belén Carreño MADRID (Reuters) - Authorities struggled to clear ice and fallen trees from the streets of Madrid on Tuesday and temperatures in parts of Spain hit record lows after a snowstorm wrought havoc across the country at the weekend. Early jubilation at the historic snowfall, which saw skiers gliding through the streets and mass snowball fights, gave way to frustration as most public transport remained stalled and pedestrians avoided the icy streets. "You in Madrid are not ready for this," said Demetrio, a Ukrainian living in Madrid, who did not give his last name.

Trump disavows any responsibility for his supporters' Jan. 6 attack
World

Trump disavows any responsibility for his supporters' Jan. 6 attack

By Steve Holland and Andrea Shalal JOINT BASE ANDREWS, Md./WASHINGTON (Reuters) - U.S. President Donald Trump, facing impeachment on a charge of "incitement of insurrection" on Tuesday disavowed responsibility for his supporters' violent invasion of the U.S. Capitol last week and said his remarks before the siege were appropriate.

Renault and Plug Power to develop fuel-cell commerical vehicles
News & Analysis

Renault and Plug Power to develop fuel-cell commerical vehicles

PARIS (Reuters) - French carmaker Renault and U.S. hydrogen specialist Plug Power have joined forces to develop hydrogen-powered light commercial vehicles, they said on Tuesday. The companies have signed a memorandum of understanding to launch a France-based 50-50 joint venture by the end of the first half of 2021, targeting more than 30% share of the fuel cell-powered light commercial vehicle market in Europe, their joint statement said