US businesses express concern about tariffs on Chinese imports

A coalition of the nation’s largest retailers and prominent business groups are expressing concern that President Trump’s plan to crack down on China’s trade practices will hit a wide swath of U.S. products. 

Business and trade groups wrote two separate letters to Trump urging him to avoid applying what could amount to $30 billion in tariffs on Chinese imports because they will drive up prices for U.S. consumers, hurt their businesses and hamper economic growth.

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The letter sent Monday by 25 major retailers including Target, Kohls, Walmart and Costco said that while the businesses support “holding our trading partners accountable and using targeted trade remedies against intellectual property theft, illegal dumping or subsidies,” they are concerned about the negative effects that will ripple across the U.S. economy.

“Investigating technology and intellectual property policies and practices is critically important to our innovative economy,” the letter said.

“Yet were this investigation to result in a broadly applied tariff remedy on imports from China, it would hurt American households with higher prices and exacerbate a U.S. tariff system that is already stacked against working families,” they wrote.

The letter comes as the Trump administration appears poised to issue another batch of tariffs, this time under a Section 301 investigation into China’s intellectual property practices.

The businesses, which say they account for more than $1.5 trillion in annual sales and tens of millions of American jobs, argue that adding another batch of broad-based tariffs would further hurt working families who already pay higher prices for clothing, shoes, electronics and home goods because of the current duties in place.

The United States has long been concerned about China’s lax intellectual property protections including requirements that force companies to transfer their technology and the theft of trade secrets and other intellectual property.

The Information Technology Industry Council (ITI) spearheaded a separate letter on Sunday and gathered support from the National Retail Federation (NRF), Retail Industry Leaders Association (RILA) and the American Apparel & Footwear Association (AAFA) that argues that any benefits from the tax package and the reduction in regulations could be lost if tariffs are applied to a wide range of consumer products.

“If the administration’s latest proposal goes into effect, Americans will see price increases on a wide range of basic products they purchase regularly at their local stores,” said NRF President and CEO Matthew Shay. 

“We agree it’s time to address China’s unfair trade practices, but we can do so in a way that doesn’t destroy jobs, create uncertainty for businesses and increase every American’s cost of living,” Shay said. 

The groups urged Trump to work with them and U.S. trading partners to ramp up pressure on China to improve the treatment of intellectual property rather than hitting China with tariffs that will broadly affect U.S. businesses and consumers.

“We urge the administration to take measured, commercially meaningful actions consistent with international obligations that benefit U.S. exporters, importers and investors, rather than penalize the American consumer and jeopardize recent gains in American competitiveness,” the 45 groups wrote. 

Rick Helfenbein, president and CEO of AAFA, said that more than 41 percent of clothing, 72 percent of footwear and 84 percent of travel goods sold in the United States are made in China.

“In addition to increasing costs for American families, this action could result in retaliatory tariffs that target American businesses, resulting in job losses,” Helfenbein said. “At the end of the day, this could be disastrous for American families, American workers and American businesses.”

The White House has indicated that it would apply tariffs under Section 301 of the Trade Act as part of their investigation into unfair Chinese technology and intellectual property policies and practices.

Under Section 301, the president has unilateral and discretionary action to retaliate against China.

“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,” the groups wrote.

“The imposition of sweeping tariffs would trigger a chain reaction of negative consequences for the U.S. economy, provoking retaliation; stifling U.S. agriculture, goods, and services exports; and raising costs for businesses and consumers,” they wrote in the letter.

Sandy Kennedy, president of RILA, said tariffs could set back the industry.

“This is not American industries crying wolf. Higher tariffs will mean higher costs to businesses and in turn higher prices for American families,” Kennedy said.

“After a major tax reform victory, widespread tariffs on everyday consumer goods will wipe out much of the benefits realized by the average American household,” Kennedy said. 

Updated at 9:10 a.m.