San Antonio Manufacturers React to Growing U.S. China 'Tariff War'

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San Antonio's growing manufacturing sector is warning that the current tariff war between the U.S. and China could lead to cutbacks nad layoffs, but manufacturers say it is part of a very important effort by the Trump Administration to open the massive Chinese market to more U.S. made products, News Radio 1200 WOAI reports.

"It is one of these things that we want to get a fair and equitable chance," Rey Chavez, President and CEO of the San Antonio Manufacturers Association, told News Radio 1200 WOAI.  "We have to do this right now, but we want it resolved as soon as possible."

Advanced manufacturing has become a bright spot in the San Antonio area economy, with huge growth in manufacturing of everything from food related products to machine tools to high tech and oilfield equipment one of the main sectors driving the region's strong economy.

Chavez says tariffs raise prices, and he wants those higher prices will have to be passed along to customers.  Those customers may balk at paying the higher prices in today's intensely price-driven economy, and that could lead to troubles for some manufacturers, and even layoffs.

"It could some to that," he warned.  "We are in a business right now that manufacturing is really going very well, so I think that is going to be a minimal impact."

Chavez says some manufacturers may decide not to lay off workers in case of a downturn in orders, largely because skilled workers will be difficult to find in today's 'full employment' economy when orders increase.  He says some companies may opt to use the opportunity to train workers on new manufacturing techniques.

China has retaliated by imposing tariffs on more than 100 U.S. made products.  Texas is by far the number one exporting state in the country, but Chavez says those tariffs will have little to no immediate impact on the strength of the Texas manufacturing economy.

"U.S. made products are of such high quality, I think buyers will continue to seek out those products," he said.

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