To fight Donald Trump’s China tariffs, hundreds of US companies descend on Washington

New Balance Athletics has long advocated for and benefited from tariffs, competing with Nike and other footwear companies while still making shoes in the United States. Now, it is among the critics of US President Donald Trump’s duties testifying at a public hearing that started on Monday.

The Boston-based firm said while it supported Trump’s efforts to force China to address intellectual property theft in a trade deal, its US factories were supported by a global supply chain connected to China and built over decades. Duties on soles and other components would hurt the business, as did China’s retaliatory tariffs on US exports, the company said.

Trump’s proposed levies won’t “just translate into higher costs, but jeopardise our ability to maintain production levels and continue investing in our domestic factories”, New Balance vice-president Monica Gorman said in comments posted online.

About 320 officials from US manufacturers, retailers and other companies and trade groups are set to appear over seven days of hearings that started on Monday at the US International Trade Commission before panels of officials from the Office of US Trade Representative and other agencies.

While some companies, including Rheem Manufacturing, support the duties, most argue that Trump should not tax their products.

The footwear firm is among the US companies lining up for the hearing to drive home a now-common point: Trump’s proposed tariffs are bad for business. But the stakes have never been higher, with the latest wave of threatened duties set to hit essentially all remaining imports from China including mobile phones, laptops, apparel and other consumer items.

New Balance has long pushed to supply US-made shoes to the Pentagon and argued against reducing tariffs on imported finished footwear when the US was negotiating the Trans-Pacific Partnership with 11 other nations earlier this decade.

But Trump withdrew from the TPP in 2017, and his use of tariffs on goods and components has drawn opposition from a swathe of US companies and industries.

While Trump likes to say China is paying the tariffs, economists say it is US importers that pay them and some of that gets passed to consumers in higher prices. Companies also say they cannot easily avoid them by moving operations outside China, as the president suggests.

“The rapid pace at which these tariffs may be imposed will leave no possible outcome, other than that the cost will be borne by US companies, their employees, retail customers, and ultimately the US consumer,” said Jeffrey Fischer, principal of Planet Gold Clothing Company in New York. He was among the first group to appear at the hearing on Monday.

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This is the fourth round of hearings, after Trump levied duties on US$250 billion of products last year. As talks on a trade deal with China faltered last month, he ordered a tariff increase to 25 per cent from 10 per cent on US$200 billion of goods and targeted an additional US$300 billion in products – including consumer goods the administration spared in previous rounds.

Some executives are coming to Washington to testify for the fourth time, even though many do not have much hope of success given that Trump sees tariffs as “beautiful” and leverage for a deal – especially after he said the threat of duties on Mexico produced an immigration pact. Some firms got goods removed from previous tariff lists, only to have them put back.

Retailers including Best Buy, Jo-Ann Stores and Forever 21 have asked to testify against duties on goods including computer tablets, smartwatches and artificial plants. Hallmark Cards said greeting cards and Christmas ornaments should be spared because of the impact on retailers, consumers and even the US Postal Service.

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Technology products account for more than half the value of the US$300 billion, which would raise prices for consumers and could prove “catastrophic” – especially for small and medium-size firms, the Consumer Technology Association said.

Almost a quarter of the more than 3,800 targeted tariff lines involve goods such as textiles, apparel and footwear, according to the American Apparel & Footwear Association. That has attracted objections from companies including Ralph Lauren, Columbia Sportswear and Designer Brands.

The proposed duties have also drawn opposition from companies that sell products including eyeglasses, fireworks, books, art, vinyl gloves, skis, fishing equipment, seafood, baby cots and toys.

“Look out, American toy shoppers here comes the Grinch That Tariffed Christmas!” Wendy Lazar, the founder of I Heart Guts plush toy company in California, posted online.

The tariffs could be imposed after a seven-day rebuttal period following the last day of the hearings.

Trump was still waiting for a response from Chinese President Xi Jinping about meeting to restart trade talks, economic adviser Larry Kudlow said last week, while warning that Beijing might face consequences it if refused.

Trump has repeatedly threatened to raise tariffs if Xi doesn’t meet with him at the G20 leaders’ meeting from June 28-29 in Osaka, Japan.

US Commerce Secretary Wilbur Ross downplayed the prospect of a major trade deal emerging from a possible meeting between the two presidents, telling The Wall Street Journal on Sunday that the most he thinks would happen was an agreement to resume talks.

China tells US it picked the ‘wrong rival at the wrong time’

Walmart, Target and Macy’s were among about 660 companies and associations that made a plea last week to Trump not to impose more tariffs on Chinese goods, and to return to the negotiating table to strike a trade deal with Beijing.

The US Chamber of Commerce is also filing comments urging the administration to finalise a deal that removes the tariffs.

Despite attempts to assure Americans there was a strategy to resolve trade disputes without hurting US interests, “these assurances lack the coherence that would provide comfort to those businesses, farms and workers whose livelihoods are being put at risk”, the chamber said.