The U.S. Trade Representative released a new round of proposed tariffs on an additional $200 billion worth of U.S. imports from China, potentially including sports bags and baseball, softball, hockey and ski gloves.
The list of items that would be hit with a 10 percent tariff also includes a wide range of household items, such as electronics, appliances and furniture. The items include fish sticks, handbags, apples, spark plugs, vacuum cleaners, furniture, auto and bicycle parts, French doors, yarn and ceramic tiles. It left untouched U.S.-branded smartphones and laptop computers.
When the list is complete, there will be a review process, and companies will be given an opportunity to petition the government to exempt their products from the new tariff. The USTR will accept public comments and hold hearings Aug. 20-23 before reaching a decision after Aug. 31.
The new U.S. proposed levies would be on top of 25 percent tariffs that the Trump administration has assessed on $50 billion of Chinese goods, $34 billion of which took effect last Friday. The first U.S. tariff list focused on Chinese industrial products, an attempt to reduce the direct impact on American consumers, including levies on Chinese solar panels, steel, aluminum and many machine and industrial parts.
The administration said the new levies are a response to China’s decision to retaliate against the first round of U.S. tariffs.
Overseas, Beijing rejected the new tariff list as “totally unacceptable” and vowed to respond with counter-measures and an additional lawsuit at the World Trade Organization—the third it has brought against the United States this year.
China’s Commerce Ministry said Wednesday that the nation would act with “necessary counter-measures,” but did not say that the government would retaliate in commensurate fashion, as it has promptly done in the past. One challenge for China is the nation only imported about $130 billion of products from the U.S. last year. By comparison, the United States imported more than $500 billion of Chinese goods.
In Congress, top Republicans raised concerns over the escalating tariffs and called on Trump to sit down with Chinese President Xi Jinping to address the conflict before it hurts more farmers, consumers and businesses in the world’s two largest economies. U.S. companies in China already have reported stalled product approvals, worker visas and licensing applications
The Trump administration’s latest move drew opposition from business groups and some Republican lawmakers, who were concerned the tariffs could be a blow to U.S. consumers and damage the economy. Investors also were concerned. The Dow Jones industrial average closed down 219.21 points, or 0.9 percent, at 24,700.45.
Trade industry organizations also widely voiced their concern over the tariffs.
Said SFIA CEO and President, Tom Cove, in a statement, “SFIA believes a trade war will hurt American consumers, businesses and workers. It’s not clear how this gets resolved once it starts. We do not support this approach to trade and encourage the president to use alternative negotiating tactics to secure concessions from China to ensure a fair playing field.”
Rick Helfenbein, president and CEO of the American Apparel & Footwear Association, stated, “This move by the Trump administration, though expected, will not do anything to help American workers, American consumers or American businesses. By including items such as handbags, hats and textiles on this additional list of products, the administration has shown that it is not concerned about targeting the American public with its ‘Trump Tax.’ This will result in inflationary costs throughout the supply chain, ultimately paid for by American consumers.”
Helfenbein noted that with more than 84 percent of U.S. travel goods coming from China, this tariffs will impact consumers “enormously.”
Helfenbein added, “The administration backed us into the corner with several months’ worth of tariffs. If this continues, it has the potential to severely impact our apparel, accessory and footwear community. As an industry, we are already highly taxed and regulated. We urge the administration to refocus on resolving the underlying issue with China, rather than finding new and creative ways to tax Americans. If the administration refuses to work on behalf of the American public, Congress must exercise its Article I Section 8 powers to regulate commerce with foreign nations.”
Some major consumer segments managed to avoid the list, including footwear, toys, mobile phones and other household electronics. However, many companies in those categories aren’t feeling immune from the dispute, and are expecting an indirect impact.
“It is impossible to see how American families and consumers are not impacted with higher prices,” said Matt Priest, president and CEO of the Footwear Distributors & Retailers of America, in a statement. “This will hurt our economy and take away disposable income from consumers who could buy more shoes. While footwear was not on this new round of tariffs announced today, our industry, the American footwear industry, is very familiar with the negative impact tariffs have on consumer goods.”
Priest noted that that in 2017, the footwear industry paid $1.5 billion in duties from China. “It is time the Trump Administration sits down with its Chinese counterparts to settle this trade war so that Americans from all walks of life aren’t left with the bill,” he said.
Retail Industry Leaders Association (RILA) Vice President of International Trade Hun Quach said in a statement, ““American retailers and the families we serve barely had time to process the barrage of tariffs implemented last week. Now, we will need to grapple with new tariffs on an additional $200 billion worth of imports, which are bound to include even more consumer products and everyday essentials.
“The President has broken his promise to bring ‘maximum pain on China, minimum pain on consumers,’ and American families are the ones being punished. Consumers, businesses and the American jobs dependent on trade, are left in the crosshairs of an escalating global trade war.
“The Administration cannot continue to move the goal post. Unless the Administration finds meaningful solutions, American businesses, families and jobs are on the losing end of this battle.”
The National Retail Federation issued the following statement from Senior Vice President for Government Relations David French: “The latest list of $200 billion of products to be subject to tariffs against China doubles down on a reckless strategy that will boomerang back to harm U.S. families and workers. The threat to the U.S. economy is less about a question of ‘if’ and more about ‘when’ and ‘how bad.’ Tariffs on such a broad scope of products make it inconceivable that American consumers will dodge this tax increase as prices of everyday products will be forced to rise. And the retaliation that will follow will destroy thousands of U.S. jobs and hurt farmers, local businesses and entire communities.
“The administration has been pursuing tariffs now for months, and we still don’t know what the endgame is. Now is the time to get back to the negotiating table with China while working through a global coalition that shares our concerns. The way things are shaping up, it may be too late, but we hope the administration changes course before we lose the momentum from tax and regulatory reform and return to an era of high prices, job loss and negative growth in our economy.”
In a sign of bipartisan trade frustration, the Senate voted 88-11 Wednesday for a nonbinding resolution that calls on the White House to seek congressional approval before issuing tariffs in the interest of national security. The Trump administration used national security as a reason to put tariffs on steel and aluminum from Canada, Mexico and the European Union this spring.
In a second statement, French applauded the Senate’s approval a “motion to instruct” related to congressional approval of national-security designated tariffs.
French stated, “There is clearly growing bipartisan concern over the administration’s reckless trade agenda as the real-world consequences of tariffs spread in communities across the country. Congress has an important role to play in protecting hardworking Americans from a trade war, and this vote is an important first step. We appreciate the leadership of Senators Corker, Toomey and Flake and hope to see this commonsense legislation continue to move forward.”
In March, more than 100 companies, including Nike, Walmart and Levi’s, urged Trump not to put new duties on products coming from China, arguing they would hurt American consumers and businesses as they hiked up prices, while having no effect on China’s attitude toward U.S. intellectual property.
“Tonight’s announcement appears reckless and is not a targeted approach,” Senate Finance Chairman Orrin Hatch, R-Utah, said in a statement. “We cannot turn a blind eye to China’s mercantilist trade practices, but this action falls short of a strategy that will give the administration negotiating leverage with China while maintaining the long-term health and prosperity of the American economy.”
Photo courtesy Hanjin