Business groups worried about Trump’s China tariffs plan

The Trump administration’s plan to slap 25 percent tariffs on a wide array of products from China got a cold reception from leading business groups that say the duties will cost jobs and damage the economy. 

U.S. Trade Representative Robert Lighthizer on Tuesday released a proposed list of Chinese imports that could receive tariff hikes as part of a Section 301 investigation into Beijing’s lax intellectual property practices.

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“The proposed list of products is based on extensive interagency economic analysis and would target products that benefit from China’s industrial plans while minimizing the impact on the U.S. economy,” USTR said a release.

The Trump administration says it intends to impose tariffs on approximately $50 billion worth of Chinese imports.

The extensive list covers about 1,300 separate tariff lines — from aerospace and communication technology to machinery and medicines — and will undergo further review in a hearing and through a public notice and comment process.

Business groups expressed concern on Tuesday over the White House’s list of proposed products, although they were pleased to see some key imports left off the list.  

The groups have repeatedly urged President Trump to work with them and U.S. trading partners to ramp up pressure on China to improve their intellectual property policies.

National Retail Federation President and CEO Matthew Shay said the tariffs create uncertainty and will increase costs for businesses and consumers.

“While we are pleased that many everyday products such as clothing and shoes are not on the list, we remain concerned that other goods such as consumer electronics and home appliances are targets,” Shay said.

“Once again, we urge the administration to work with our trading partners to hold China accountable, advance targeted solutions and recognize the unintended consequences of protectionist trade policies,” he said. 

The Trump administration argues that China forces U.S. companies to give their technology and intellectual property to its domestic firms.

Business groups say they agree that the U.S. needs to combat intellectual property theft by China but are worried about the broad effects of the tariffs. 

Myron Brilliant, executive vice president and head of international affairs at the U.S. Chamber of Commerce, said that while the administration is “rightly focused on restoring equity and fairness in our trade relationship with China,” tariffs aren’t the way to go.

“Imposing taxes on products used daily by American consumers and job creators is not the way to achieve those ends,” Brilliant said in a statement.

The Business Roundtable said that “unilaterally imposing $50 billion of new tariffs without a long-term strategy that leads to economic reforms in China will only hurt America’s businesses, workers and families.”

“Instead, the administration should work with U.S. allies on an approach that advances meaningful reform in China without imposing significant harm on America’s economy,” the group said in a statement.

Business groups also are worried about more backlash from China, which earlier this week raised tariffs on a wide range of U.S. exports such as pork and wine.

National Association of Manufacturers President and CEO Jay Timmons said imposing tariffs is likely to create new challenges.

“Tariffs also run the risk of provoking China to take further destructive actions against American manufacturing workers,” Timmons said.

In January, Timmons sent a letter to President Trump urging him to pursue a trade agreement with China to restructure the economic relationship.

“If the imposition of tariffs is the first bid in negotiating a more level playing field, manufacturers believe the end product must be a new, strategic approach that includes negotiating a fair, binding and enforceable rules-based trade agreement with China that requires them to end their unfair trade practices once and for all,” he said.

After completion of review process, USTR will issue a final determination on the products subject to the additional tariffs.

The Information Technology Industry Council (ITI) President and CEO Dean Garfield said that “if history is any indication, these proposed tariffs will not work and will be entirely counterproductive.”

“Tariffs penalize U.S. consumers by increasing prices on technology products and will not change China’s behavior,” Garfield said.

In March, ITI led a coalition of more than 45 business associations urging President Trump not to include tariffs as a potential remedy to address China’s unfair trade policies. 

The U.S. agriculture community also has expressed concerns about how the tariffs would harm their businesses.

Former Sen. Max Baucus, co-chairman of Farmers for Free Trade, said with regards to the tariffs, “Farmers are going to get squeezed by this decision from all sides.”

Baucus, the former U.S. ambassador to China, said the tariffs will not only make farming equipment more expensive, but there is the concern that China will continue to target agriculture in retaliation.

“American farmers are watching this daily trade escalation closely, and they are worried,” he said.