Author: Tronserve admin
Friday 30th July 2021 03:44 AM
U.S. Companies' Message to Trump: Don't Expand China Tariffs
What happens if President Donald Trump carry through his warning to inflict tariffs on the remaining $300 billion in Chinese goods that he hasn't already hit with 25 percent import taxes?
A New Hampshire fireworks company says it would have to bring up prices, probably lose business and force some small towns to cancel their Fourth of July fireworks displays.
A Minnesota motorcycle maker alerts that it would lose business to foreign rivals that don't have to pay taxes on Chinese parts.
A Los Angeles designer and distributor of houseware goods says it would need to extend a hiring freeze and holdup plans to spread out into a greater warehouse.
The administration, in the course of the trade war it began with Beijing, had demanded comments on its plan to prolong 25 percent tariffs to everything China ships to the United States.
It's getting an earful.
Countless businesses, trade groups and individuals have written to protest that the further import taxes would drive up prices for consumers, squeeze profits and leave U.S. companies at a competitive disadvantage to foreign opponents that are typically not susceptible to higher taxes on the vital components they buy from China.
They're appealing with the administration to rethink the tariffs — or at least reserve the individual imports they and their customers rely on. Some will appear in person to air their grievances in seven days of hearings in Washington that begin Monday.
The typical theme in their pleas is that often American businesses — not China, as Trump often asserts — must pay the import taxes the president is imposing on Chinese goods. And in the end, some of these companies will pass their higher costs on to their customers.
Trump has already imposed 25 percent tariffs on $250 billion in Chinese imports. The objective is to push Beijing to halt stealing American technology, forcing U.S. businesses to hand over trade secrets and unfairly subsidizing Chinese tech companies.
Eleven rounds of negotiations were unsuccessful to resolve the dispute over China's aggressive drive to surpass America's technological dominance. Businesses and investors say they hope the negotiations will gain momentum if Trump and President Xi Jinping hold a face-to-face appointment at a Group of 20 summit in Osaka, Japan in two weeks.
"Most businesses are almost praying for a solution," said Patrik Berglund, who tracks global trade as the CEO of Xeneta, an Oslo, Norway ,firm that provides data on the shipping industry. "These things will have enormous consequences. We're so connected in this global world."
Trump's earlier tariffs largely spared American consumers by working on industrial goods that don't show up directly in the mall or big-box stores. But the new round will inflict financial pain on ordinary households just because it will affect many consumer goods, from cellphones and computers to shoes and silk scarves.
"We're talking about things that you and I buy and buy in a store, and that's going to be felt directly by consumers," said Neil Bradley, chief policy officer at the U.S. Chamber of Commerce. The companies that serve the retail market, he explained, tend to have "much, much less margin to absorb those increased tariff costs."
A study commissioned by the National Retail Federation found that American consumers would pay an alternate $4.4 billion a year for clothing, $2.5 billion more for shoes and $1.6 billion more for household appliances.
More broadly, economists say the tariffs could deteriorate a U.S. economy that seems to be on shakier footing. Mark Zandi, chief economist at Moody's Analytics, said the increasing import taxes would leave the United States with 900,000 fewer jobs than it would have had otherwise.
"The U.S. economy will be flirting with recession later this year and early next," Zandi said.
Indian Motorcycle Co. in Medina, Minnesota, complained that its international competitors will not have to pay a tax on Chinese parts, giving them to "import the finished motorcycle into the United States — without increased costs."
Excluding motorcycle parts from the tariffs, a company lawyer, Paul Vitrano, wrote, would "avoid the unintended consequence of providing foreign-based motorcycle manufacturers with a competitive advantage."
Carltons Men's and Women's Apparel store in the Delaware beach town of Rehoboth says the tariffs would force it to raise prices — a $500 suit could cost $625 — and lose business and cut its staff of 15. "If revenue declines, then payroll must, too," said owner Trey Kraus.
Oppositions to the tariffs are typically not unanimous. The Bohning Co., a maker of archery products in Lake City, Michigan, asserted that Chinese companies are counterfeiting its products and have simpler access to the U.S. market than it has to China's.
"The 25 percent tariffs should be put in place," wrote CEO Larry Griffith.
And yet most of those who sounded off on the tariffs were implacably opposed to them — and worried.
"We beg, plead and pray you will use common sense in these trade practices and consider the little guy!!" wrote Alan Chadwick, who imports silk scarves from China and sells them in Wyoming. "We are just ants who get trampled under fighting buffalo."
This article is originally posted on manufacturing.net