Due to Europe’s close ties with America, it is no surprise that the crisis across the Atlantic is affecting how our companies do business. American makers of drugs, clothes, solar panels, and computers have reportedly felt the effects and uncertainties that the crisis could worsen are scaring consumers and investors just as the holidays roll around. Europe’s struggling growth is already slowing the profits of certain U.S. companies and could eventually affect the entire economy.
Presently, the U.S. economy is especially vulnerable as it not too strong itself-it currently faces weak hiring, stagnant pay, a wide trade deficit, possible tax increases, high energy costs, and potentially steep spending cuts in government. Wells Fargo estimates that the U.S. economy will have grown 0.4% point lower than it’s estimated 2.1% due to Europe’s stagnation.
Already, the European market is affecting U.S companies and consumers in multiple ways:
1. Rocky stock market make consumers more conscious of their spending
2. Lower sales, prices, and profits
3. Banks are cutting lending
4. Uncertainty causes reluctancy to spend and invest
American companies should put up safety precautions for foreign investment and trades because, as we all know due to globalization, if the European market goes down, they’re dragging the world along with it.
Link: http://abcnews.go.com/US/wireStory/us-companies-feeling-impact-european-crisis-14943671#.TsA7BOtc8Xw