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Escalating trade war may steer tax cuts' windfall to even more buybacks

Capital expenditures will likely continue to decline and buybacks will increase even if tensions between the United States and its trading partners cool off

Reuters  |  New York 

The escalating trade war between the United States and China may prompt US companies to shift money they had earmarked for capital expenditures into stock buybacks instead, pushing record levels of corporate share repurchases even higher. Such a move away from capital reinvestment would also undercut one goal of the Trump administration's signature $1.5-trillion tax cut, which supporters said was intended to unleash a wave of new investments in factories and workers at home. Instead, fund managers say, the reality of tit-for-tat US and Chinese tariffs on more than $34 billion ...

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First Published: Thu, July 12 2018. 23:18 IST