Tariffs are a hidden tax on American consumers, Walmart, Apple and other retail giants tell US trade panel

As public hearings continue, the chorus of voices of opposing additional duties on Chinese imports grows louder

PUBLISHED : Friday, 24 August, 2018, 1:55am
UPDATED : Friday, 24 August, 2018, 10:53pm

An industry group representing Walmart, Target, Apple and other major US retailers has urged the Trump administration to remove more than 650 items from a list of Chinese imports subject to future tariffs, saying US consumers would be the ones hardest hit.

“Consumers, not China, will ultimately be the ones paying the tariffs imposed on millions of consumer products,” the Retail Industry Leaders Association (RILA) said on Thursday.

The request came on the same day that previously announced tariffs on US$16 billion worth of Chinese imports went into effect, adding to the US$34 billion levied last month.

Watch: Origins and impact of US-China trade war

The trade group was responding to US President Donald Trump’s announcement of another round of tariffs on US$200 billion more of Chinese goods.

Mattresses are on the proposed 301 tariff list; 301 is a bed tax. Replacing a light bulb will be more expensive because of the tariff – 301 is a double tax every time you turn on the lights
Hun Quach, VP of the retail trade group RILA

The Office of the United States Trade Representative is finalising the list of products subject to the new duties, and the inter-agency “301 Committee” is holding six days of public hearings on the subject. The committee is named after the “Special 301 Report” into intellectual property rights released by the office in April.

The retail association’s comments follow those of other industry groups appearing before trade officials, who have heard expressions of anger and frustration as business representatives speak of the financial havoc the tariffs will impose.

US retailers have already been hit hard by the administration’s import taxes and tariffs on goods from Canada, Mexico, China and the European Union, and the new round of tariffs will only inflict more pain.

RILA, which represents more than 200 retailers, said that it supported the administration’s goal of holding China accountable, but that “tariffs are not the answer in getting China to take action”, said Hun Quach, a vice-president of the group who will testify before the committee on Friday.

“The administration made the commitment to put minimum pain on consumers,” Quach said. “We urge the administration to keep that commitment to the American people.”

More than tariffs: China sees trade war as new US containment tactic

The association asked that more than 650 items be removed from the proposed list of products subject to duties, saying they “will make the items Americans use every day less affordable”.

Tariffs were a hidden tax that will cut into the streak of record growth, Quach said, promising to illustrate their impact on American consumers on Friday.

“Need a new mattress? Better buy it soon,” she said. “Mattresses are on the proposed 301 tariff list; 301 is a bed tax. Replacing a light bulb will be more expensive because of the tariff – 301 is a double tax every time you turn on the lights.

“Everything you need to get ready in the morning – from bar soap, make-up, electric shavers, hair appliances and accessories, even your toilet paper, will get hit with the 301 tariff.”

New tariffs on China will hit American hip pockets, say US firms

The association also listed frozen shrimp, salmon, table lamps, shavers, plastic rain jackets and toilet paper as items whose prices would rise.

Retailers have started looking for ways to mitigate the cost increases. Walmart has asked its beauty suppliers to consider sourcing products from countries other than China, media reports this week said.

Watch: Trade war fears for Chinese pork

Walmart’s chief financial officer, Brett Biggs, said in an earnings call last week that the company was “closely monitoring the tariff discussions” and was “actively working on mitigation strategies, particularly in light of potentially escalating duties”.

Trump seeks ‘results-oriented’ ties with China as resumption of trade talks nears

In July, Apple CEO Tim Cook reiterated the company’s position that tariffs could have “unintended consequences” for both consumers and the economy.

In defending the tariffs, the Trump administration has cited China’s ambition to become a world leader in tech and innovation, detailed in the “Made in China 2025” plan.

The Information Technology Industry Council, which represents global technology companies such as Google and Samsung, said the administration should focus on China’s cybersecurity law, not its tech programme.