US business group urges Donald Trump to delay new China tariffs coming ‘at the worst possible time’
- Americans for Free Trade, comprising 150 industry associations, wants US president to delay levying 15 per cent duties on US$300 billion of Chinese goods
- The tariffs, first set at 10 per cent, moved a step closer as the US government scheduled an official filing confirming the move
A broad coalition of American industry associations on Wednesday appealed to US President Donald Trump to delay new tariffs on imports from China, arguing that the punitive measures against Beijing “come at the worst possible time”.
Some 150 business groups comprising an umbrella organisation called Americans for Free Trade sent a letter on Wednesday to Trump, to fight tariffs of 15 per cent on US$300 billion of Chinese imports to the US, many of them consumer goods.
Those tariffs, which were earlier set to be 10 per cent, moved a step closer on Tuesday as the US government scheduled an official filing confirming the move. US tariffs of 25 per cent already apply to some US$250 billion worth of imports from China.
“We are writing with an urgent request that you postpone all tariff rate increases on Chinese goods that are scheduled to take effect this year,” Americans for Free Trade said in the letter.
“These tariff rate increases – some starting as early as Sunday – come at the worst possible time, right in the middle of the busy holiday shipping period.
“Action is needed by you to protect American businesses, workers and consumers this holiday season.”
The coalition comprises a wide range of businesses and interests – including the American Petroleum Institute; the Telecommunications Industry Association, which counts AT&T and Apple as members; PeopleforBikes, a non-profit cycling advocacy organisation; and the National Fisheries Institute.
Former White House adviser Steve Bannon, one of Washington’s most vocal critics of US engagement with China, dismissed the appeal from industry groups.
“Capitalism is adaptive, so Wall Street will adapt,” Bannon, who served as chief White House strategist for the first seven months of Trump’s administration, said in an emailed response to questions.
“It is never a ‘good time’ to move for globalist manufacturing companies that chased the slave labor of China,” Bannon added. “The President is adamant, and they’ve been warned — the supply chains must come home.”
Americans for Free Trade was formed nearly a year ago in response to the bilateral trade war that Trump started in July 2018 to force China to take measures to reduce its trade surplus with the US, provide more access to its markets for American companies and ease technology transfer requirements as a prerequisite for doing business in China.
The group’s letter ratchets up the pressure on the Trump administration, which has come under criticism for sending conflicting messages about whether the president is open to a resolution in the trade stand off and mounting penalties US companies are paying for Chinese goods.
The trade war has not resolved the problems identified by last year’s US Trade Representative Section 301 investigation into China’s trade practices, which provided the rationale for the launch of Trump’s trade action, said Naomi Wilson, the Information Technology Industry Council’s (ITIC) senior director of policy for Asia.
“The administration now has had a year to test the assumption that tariffs will yield better outcomes to open the Chinese market and address unfair trade practices, which is what they were initially seeking with the 301 investigation. I think by any measure, the tariff strategy has not worked,” Wilson said in an interview.
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Based in Washington, the ITIC, which represents Apple, Google, Samsung and other global technology giants, is part of the Americans for Free Trade group.
The ITIC cited several data points as evidence that the trade war is not delivering on its objectives, including a report last week by the nonpartisan Congressional Budget Office, which said changes in US and foreign trade policies since January 2018 will reduce inflation-adjusted US gross domestic product by 0.3 per cent by 2020.
“You’ve either got to cut more profit or you’re going to pass it on to the consumers, neither of which is helpful to the economy.” said Simon Croom, professor of supply chain management at University of San Diego.
“If new tariffs are going to be introduced in a week’s time, and it will take six to seven weeks to ship from the ports in China to those in the US, you’re not going to be able to respond quickly enough,” Croom added. The effect of the new tariffs will hit heading into “peak retail season and peak manufacturing season. How on Earth do you manage that disruption?”
The Americans for Free Trade letter to Trump was copied to United States Trade Representative Robert Lighthizer, Trump’s top economic adviser Larry Kudlow, Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and Agriculture Secretary Sonny Perdue.
White House trade adviser Peter Navarro, one of the Trump administration’s pivotal drivers of the trade war, was not one of the recipients.
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“By sending the letter to the president, we expect much of his staff will also see it,” Matt McAlvanah, an Americans for Free Trade spokesman, said when asked why Navarro was left off the recipient list.
A report released earlier this month by Tariffs Hurt the Heartland, another coalition of businesses and trade organisations opposed to the tariffs, said its analysis showed a 74 per cent surge in June tariffs year-on-year, to US$6 billion.
Some US$3.4 billion of that increase is attributable to new duties levied by Trump since he began the trade war last year, the group said.
The group’s report – compiled from US Treasury and Census Bureau data – was the first look at the impact of the steep escalation of tariffs on US$200 billion of Chinese goods from 10 per cent to 25 per cent in May.
