Industry Groups Criticize Tariffs and Push to Limit the Impact

(Bloomberg) -- Industry trade groups and companies quickly vowed to push back against President Donald Trump’s decision to order tariffs on Chinese goods and try to limit the number of products that are included.

Broad-based tariffs will likely translate into higher prices in U.S. stores because a vast amount of items used by American consumers -- including Under Armour leggings, Bath & Body Works shower gel and Samsonite luggage -- are sourced from Chinese- or Hong Kong-based companies and factories.

U.S. retailers and their lobbyists have grown increasingly vocal in recent days as the president telegraphed his decision. Walmart Inc., Macy’s Inc. and more than 20 other retailers sent a letter to Trump earlier this week urging him to reconsider the idea.

“We will continue engaging with congressional leadership and the administration to advocate for an approach that doesn’t negatively impact American jobs, jeopardize economic growth and increase the cost of living for American families,” Matthew Shay, president and chief executive officer of the National Retail Federation, said in a statement Thursday after Trump announced his decision levy tariffs on at least $50 billion in Chinese imports.

The retail group is pleased that consumer products weren’t at the top of the list the White House initially targeted and will work to identify products that may be at risk for tariffs, said David French, senior vice president for government relations.

International Obligations

The technology industry trade group ITI said it will provide feedback during the 30-day comment period before the tariffs become final. That period begins once the office of U.S. Trade Representative Robert Lighthizer designates a list of products that will face higher tariffs.

“These measures could violate international obligations and – more importantly – would punish U.S. consumers, businesses and workers for China’s action,” Dean Garfield, ITI president and chief executive officer, said in a statement.

Earlier this week, ITI led a coalition of 45 business associations that sent a letter to Trump urging him not to impose tariffs and risk triggering “a chain reaction of negative consequences for the U.S. economy” with Chinese retaliation.

Chinese ambassador to the U.S. Cui Tiankai said in a video posted on the embassy’s Facebook page that while China doesn’t want a trade war, “If people want to play tough, we will play tough with them and see who will last longer.”

Business Voices

The U.S. Chamber of Commerce, which signed on to the letter from the business associations, said that while the administration is right to seek equity and fairness in the trading relationship with China, sweeping tariffs are not the answer.

“Imposing taxes on American consumers and job creators in the form of new tariffs is not the way to achieve those ends,” the chamber said in a statement, adding that it “looks forward to engaging the administration during this process to ensure the business community’s voice is heard on U.S.-China trade matters.”

The Consumer Technology Association welcomed Trump’s decision to accept comments on the order to impose tariffs but warned that a trade war with China could affect the almost 2.5 million U.S. jobs associated with trade involving technology products.

“Unfair trade practices must be addressed, but the solution is not to put a new tax on U.S. businesses and force consumers to pay dramatically more to access the technology products they need,” Gary Shapiro, the group’s president and chief executive officer, said in a statement.

‘Paying the Price’

Freedom Partners, a group affiliated with billionaires Charles and David Koch, said Trump’s order, coming after he authorized tariffs of 25 percent on steel and 10 percent on aluminum earlier this month, will undermine the benefits from the tax overhaul enacted last December, harm the economy and kill jobs.

“Each time tariffs are levied, it’s Americans who wind up paying the price, not other countries,” Freedom Partners Executive Vice President Nathan Nascimento said in a statement. “We should be working to expand upon the growth and relief borne from historic tax reform, not raising prices on those who can least afford it.”

Rather than imposing tariffs, the administration should pursue a comprehensive approach that includes working with international partners to identify unfair trade barriers and practices China must change, setting deadlines for action and outlining the U.S. response to inaction, the Business Roundtable said.

“Unilaterally imposing tariffs or other restrictions without a long-term strategy to bring about reforms in China will only raise prices in America, make American companies and products less competitive, and harm U.S. workers and consumers,” the group said in a statement.

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