On Friday President Trump is expected to announce a new round of tariffs on Chinese goods that could amount to $60 billion per year. Business leaders are saying this could create a chain reaction that could lead to an economic disaster for the United States.
The White House has said to expect tariffs covering a very wide variety of products, including clothing, footwear, transportation goods, telecommunications equipment, electronics, and even imported parts for products made in the United States.
The U.S. Chamber of Commerce has warned that $60 billion of annual tariffs on Chinese goods would be “devastating” to the U.S. economy.
As a result, 45 major trade organizations in the U.S. are pleading with Trump to hold off on the announced tariffs on Chinese imports. According to a spokesman for the group, Trump’s plan would “would trigger a chain reaction of negative consequences for the U.S. economy.”
The 45 groups include trade organizations representing the largest industries in the country, such as the Consumer Technology Association and the National Retail Federation. Examples of businesses who belong to these trade organizations include Walmart and Apple.
The group sent a letter to President Donald Trump on Sunday in which they asked the president to seek out “other strategies for addressing China’s business practices.” American consumers would end up paying more if tariffs are imposed, the trade groups warned.
“Tariffs on electronics, apparel, and other consumer products would increase prices for U.S. consumers and businesses, while doing little to address the fundamental challenges posed by unfair and discriminatory Chinese trade practices,” they said in the letter.
The president has been very critical of the huge trade deficit the U.S. has with China, which by some accounts is approaching $400 billion per year. He has also accused the Chinese of actively stealing intellectual property from American companies who do business in the massive Asian country with a population of 1.4 billion consumers.
According to the trade groups, tariffs would provoke retaliation from the Chinese. This would curtail U.S. exports to China, and would increase costs for both businesses and consumers. They said this would result in much higher prices for electronics, apparel and other products sold in the U.S. It would also hurt companies in the U.S. that sell components of the final products that are exported from China.
In addition, U.S. manufacturers say they would have to pay much more for their product components, raising their costs and lowering their sales. They also foresee disruption of their supply chains and the loss of thousands or tens of thousands of jobs. Products manufactured in the U.S. represent 85 percent of exported goods from the U.S., totaling $1.3 trillion per year. These broad and deep tariffs would also result in lower consumption of products which would lower sales and severely depress stock markets, the groups said.
It is widely thought that China will respond to tariffs by imposing higher import taxes on U.S. goods, among other things.
“The Chinese have already signaled that they will aim at things that affect the United States politically as well as economically,” said Claude Barfield, a former consultant with the U.S. trade representative. “The farmer in Kansas or Iowa could feel it,” he said. “U.S. high tech companies could feel it because the supply chains for iPhones go through China.”
Republicans in Congress have been shut out of administration tariff discussions, which has some of them upset and afraid that they will suffer politically. Off the record, some of them have stated their concern that the tariffs would reduce the economic benefits that they hope will arise from the GOP tax plan which was passed in December.
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