President Donald Trump’s latest tariffs are officially in effect, applying to roughly $109 billion worth of imports from China including an array of consumer-facing goods.
While that tax will hit consumers first, it could soon have an impact on the labor market, according to Michael Solomon, co-founder of 10x Ascend, a compensation negotiation firm for tech professionals.
“I think we’re going to start to see it in the job markets,” Solomon told YFi AM on Tuesday. “I think we’re going to see the unemployment number affected in job growth because it has to impact somewhere in our economy and that’s where the costs are getting absorbed.”
The comments from Solomon come amid a strong labor market, with the unemployment rate for July just above a 50-year low. But with no end in the U.S.-China trade war, Solomon thinks nearly every field could soon suffer job losses.
“There’s a lot of job loss coming overall in the markets because of technology,” he said, “but I think in the short-term we’re going to see that in the middle level jobs, the lower level white collar jobs, in the administrative jobs, in restaurants, in retail, in manufacturing of course, and it’s going to have a big impact.”
‘The bottom is going to fall out’
Business executives are already spooked by the ongoing trade war and have taken action at their companies, according to Solomon. “We’re seeing a lot of signs of contraction because of the fears that are coming now. So there’s a few hiring freezes already in play.”
He added: “And what we see at 10x Ascend, is companies that are hiring senior technologists, are doing it more aggressively because they’re afraid that somebody at the top is going to say ‘no more hiring.’ ... And then on the lower end of the market, we’re seeing things starting to cool off a little bit.”
The rise of automated jobs could exacerbate the effects of the trade war, Solomon said. Indeed, in June a report from Oxford Economics found that industrial robots could replace 8.5% of the global manufacturing workforce by 2030.
Solomon noted that some politicians have emphasized the need for job retraining amid all of this technological change. “The bottom is going to fall out for tens of millions of Americans over the next few years,” Solomon said.