Businesses vie for protection at hearing on Trump’s China tariffs

American companies took turns Tuesday beseeching the Office of the United States Trade Representative (USTR) to protect them from potential tariffs on China.

The hearings, which will run over three days, are an opportunity for the Trade Representative to get feedback on President Trump’s plan to impose $50 billion in tariffs on China for unfair trade practices under Section 301 of the trade law.

Many businesses that could benefit from the tariffs, such as representatives from American steel companies, were on hand to make the case that their industries deserved protection in the form of import taxes, which would make competing foreign products more expensive.

{mosads}“We think the impact would be very positive,” said Tim Brightbill, speaking on behalf of SolarWorld Americas, before adding: “USTR may want to consider additional remedies as well, in addition to tariffs.”

“I support the duties by the United States government firmly,” said George Carlisle of AlterSciences, an IT startup.

Owen Herrnstadt, of the International Association of Machinists and Aerospace Workers, told the committee that tariffs on aerospace parts that failed to make Trump’s list would be helpful to his industry.

But other executives came to protest the potentially negative impacts of tariffs on their businesses, spelling out scenarios of gloom and doom should the government follow through on threats to impose the import taxes.

“We would be severely impacted if [Section] 301 tariffs were enacted,” said George Tuttle III of Sanden International, which builds automotive air conditioning.

The tariffs would affect his supply chain, he said, by adding $3.5 million in duty payments to the cost of their components. The process of finding new suppliers would also be lengthy and time-consuming, he added, saying that it could take years to find, vet, test and approve new supply lines.

“At this point we have locked in contracts,” he said. “The company will have to eat the additional duties, and that’s going to affect their staffing levels.”

All told, he predicted, tariffs would force the company to lay off 39 people initially and delay or cancel planned investments.

The suggested trade actions have put businesses in a bind. Many are frustrated that China engages in unfair trade practices, particularly when it comes to intellectual property theft. But they also harbor concerns that imposing punitive tariffs would spark a trade war, send prices soaring and disrupt business, without guaranteeing any results.

“Enabling a retaliatory trade war will only advantage China’s growing industry at the expense of American production,” said Edward Brzytwa of the American Chemistry Council.

“Our preferred pathway to solving these problems is constructive, thorough, and sustained negotiations focused on pragmatic solutions to the challenges of China’s mercantilist policies,” he added.

Indeed, negotiations between the U.S. and China on how to address some of the trade difficulties, which failed to yield concrete results last week, continued this week. 

The outcome of the negotiations is far from certain, and may not please all the companies with a stake in the results. President Trump turned heads when he tweeted support for Chinese company ZTE, which had been forced to shutter its doors in the U.S. due to concern over intellectual property and security.

Trump is also in the process of trying to hammer out an updated NAFTA agreement in time for congressional fast-track approval. He also wants to strike a deal with major trade partners such as the European Union over steel and aluminum tariffs.