Fitch: Trade conflict could lead to higher unemployment, lower income and lower state tax revenues

"US state budgets will not be much affected in the near term by additional tariffs on US-China trade," Fitch Ratings wrote in a recently published report entitled "US-China Tariffs Could Pressure Long-Term State Revenues." Below are some key takeaways from the publication.

• There could be some regional pressure if an industry that is heavily dependent on imported Chinese products is heavily concentrated in a particular business sector.
• In the long run, the cumulative effect of increasing bilateral tariffs and/or a broader trade conflict could eventually lead to a combination of higher unemployment, lower income and lower state tax revenues.
• There may be a long-term impact on the most exposed states if the US-China trade war escalates to a broader range of goods and services.