Businesses clamor for Trump’s ear as $300 bn in new China tariffs loom
Washington is planning another tidal wave of tariffs on Chinese imports that represent a worst-case scenario for markets and major industries on both sides of the Pacific.
And on Monday, seven days of public hearings are due to begin as major businesses issue their loudest warnings yet about layoffs, lost business and America’s waning industrial predominance.
Some industries, such as steel and aluminum producers, have benefitted from President Donald Trump’s trade policies and strongly support tariffs.
But the lion’s share so far are pleading with his administration to spare the imports they depend on — if not to step back from the brink of an unprecedented all-out trade conflict that economists say would prove dire for global growth.
Should they take effect, the newest $300 billion round of tariffs — which follow last month’s sudden crackup in trade negotiations with Beijing — would mean stinging duties cover just about all of the more than half trillion dollars in goods that Americans buy from China every year.
Major trade bodies share Trump’s principle grievances with Beijing, accusing it of rampant industrial espionage and massive state intervention in markets.
But in a letter to Trump on Thursday, hundreds of US companies large and small, including retail giants Target and Walmart, warned Trump the new tariff round could cost two million jobs and cut US GDP growth by a full percentage point.
So far, Trump has imposed tariffs on more than $250 billion in Chinese goods but this has spared most consumer items from major price increases.
Still, William Reinsch, a trade policy expert at the Center for Strategic and International Studies, told AFP the new tariffs were likely to pinch
ordinary consumers far more.
“Unlike the previous times, I think there’ll be a sharp negative reaction
from the public,” he said.
“If these things go into effect in July, what you’re going to see is fairly
immediate price increases on a whole bunch of things right at the point where
people are gearing up to shop for the fall season, for winter clothes and for
Christmas.”
Trump has pinned hopes for resolving the impasse on a planned meeting with
his Chinese counterpart Xi Jinping later this month at the Group of 20 summit
in Japan.
– America makes no tea –
Should Xi fail to attend, Trump told CNBC this week, he could impose the
new tariffs “immediately” — although the period for public comment on the
tariffs extends beyond the conclusion of the summit.
At the hearings, more than 300 people are scheduled to testify. And the US
Trade Representative’s office has collected more than 1,200 written comments
and requests to appear in person.
“We are not able to quickly or simply shift all manufacturing to other
sourcing countries, resulting in price increases for the average US
consumer,” wrote Patrice Louvet, CEO of Ralph Lauren Corporation. “This
ultimately undermines American competitiveness.”
Oilfield services giant Halliburton warned of job cuts and decreased US
oil-and-gas exploration if duties rise to 25 percent on barite, a key mineral
used in drilling fluids for which China has the world’s largest reserves.
Smaller businesses also came forward.
“We would like it to be known that the retail segment of the economy is
preparing for a big hit and pray that the present administration consults
God,” said an anonymous retailer in western Kentucky that imports outdoor
seating and artificial Christmas trees, among other items, but supported
Trump’s trade policies overall.
Lu Yu, vice president of the China Chamber of Commerce of Food Stuffs,
Native Produce and Animal Byproducts, said putting tariffs on Chinese tea
made no sense.
“The USA is not a tea producing country,” she wrote.
“The tea industry of the USA does not need to be protected by tariffs and
there is not any tea grower or group that would be protected.”
Trump’s departing chief economist Kevin Hassett told CNBC on Friday the
possible Trump-Xi meeting at the G20 summit could yield rapid improvements.
“I think the hope is that at the G20 meeting the two presidents can get
together to start to get closer to where we were a few months ago where we
really, really close to having a deal,” he said.
But Trump’s commerce secretary, Wilbur Ross, told the Wall Street Journal
on Sunday he thinks “the most that will come out of the G-20 might be an
agreement to actively resume talks.”
“At the presidential level they’re not going to talk about the details of
how do you enforce a trade agreement,” Ross said.
And the specter of such a massive hit to consumers’ wallets holds political
peril for Trump.
Polling last month by Monmouth and Quinnipiac universities showed
majorities disapproved of Trump’s trade policies and expected his tariffs to
raise prices.
Reinsch of CSIS said Trump was left with a dilemma, as Beijing was not
likely to meet his toughest demands.
“The president has a choice: accept a weaker agreement or continue the
war,” he said, adding that either outcome would leave him vulnerable to
attacks from Democrats.
“I don’t see a clean way out of this.”
