Mnuchin speaking with Walmart, top retailers about tariff exemptions

Treasury Secretary Steven Mnuchin said Wednesday that he was speaking with the chief executives of major U.S. retailers about exemptions from a new round of proposed tariffs on Chinese goods.

Mnuchin told House lawmakers during a Wednesday hearing that he’s spoken with the leaders of several companies, including the chief financial officer of Walmart, about preventing price increases for a swath of consumer goods imported from China.

{mosads}“There may be a small number of items where the cost of the tariffs may be passed on and those are the things that would be subject to exceptions,” Mnuchin told the House Financial Services Committee.

Walmart, Nike and Adidas are among several U.S. retailers that announced they will be forced to raise prices if President Trump follows through on a threat to tariff roughly $300 billion in Chinese goods.

The proposed tariffs would cover hundreds of food items, agricultural products, articles of clothing, shoes and other consumer goods imported from China with a 25 percent tax.

Mnuchin said that “China’s footing most of the bill for” Trump’s previously imposed 25 percent tariff on $250 billion in Chinese goods.

But Mnuchin said that he was meeting with the Commerce Department and the Office of the U.S. Trade Representative to identify essential consumer goods to exempt from tariffs if they cannot easily be sourced outside of China.

“We are monitoring carefully,” Mnuchin said. “There will be some exceptions.”

Though Mnuchin ceded that consumers may face higher prices under Trump’s proposed tariffs, the secretary downplayed the overall cost of the trade war with China on the U.S. economy.

“My expectation is a lot of this business will be moved from China to other places in the region so that there will not be a cost,” Mnuchin said. He added that China’s declining currency would allow U.S. importers to buy at lower prices and predicted narrowing margins for Chinese businesses.

While the Trump administration has sought to minimize the potential harm of the U.S.-China trade war, the domestic economy faces several threats from further tensions with Beijing.

Economists widely project Trump’s proposed tariffs to slow the U.S. economy, potentially into a recession, through higher prices, lower consumer confidence and the pain of Chinese tariffs on the ailing agriculture sector.