The Trade War Continues and Businesses are Responding
The trade war raging between the U.S. and China, which seemed headed toward a resolution before President Donald Trump in May accused the Chinese of reneging on commitments they made, is obviously the talk of the global trade-o-sphere.
Trump on May 9 announced tariffs on $200 billion worth of Chinese imports would go from 10 percent to 25 percent. China fired back by announcing it would hit $60 billion worth of U.S. imports with tariffs ranging from 5 percent to 25 percent on June 1. So, the Trump administration countered by saying it would impose 25 percent tariffs on all remaining Chinese imports—or about $300 billion worth of goods—“shortly.”
The president beat back the backlash by saying U.S. tariffs would be paid “largely” by the Chinese, but even members of his own political party argue that the tariffs have been and will be paid almost entirely by American businesses and consumers. “There will be some sacrifice on the part of Americans, I grant you that,” said U.S. Sen. Tom Cotton (R-Arkansas) to CBS News.
Obviously, not everyone (including Trump supporters) agree with the president’s March 2018 proclamation, “Trade wars are good, and easy to win.”
-Vijay Eswaran, entrepreneur, speaker, philanthropist and founder and executive chairman of the Hong Kong-based multi-business conglomerate QI Group of Companies: “Trade wars are never good, and certainly not easy to win. The main victims of this tariff war are the American consumers. Tesla had to raise the price of two of its cars by $20,000 last year after a new round of Chinese tariffs. Walmart and Target have already warned the government about an increase in prices on many everyday essentials. It’s just going to get worse.”
-Nelson Dong, senior partner at the international law firm Dorsey & Whitne, where he is co-head of their Asia group, as well as a current member of the boards of directors of the National Committee on U.S.-China Relations and the Washington State China Relations Council: “As has already been evident since mid-2018, the Administration’s Section 301 tariffs and China’s retaliatory tariffs will now further disrupt—or even break—many thousands of supply chains in both countries as local consumers either turn away from buying affected imports or are just forced to pay the resulting higher prices. Inevitably, suppliers in third countries will also be eyeing this U.S.-China trade war and looking to take advantage of the situation to replace either Chinese or American sources of supply as many importers look for ways to avoid these punitive tariffs.”
-Americans for Prosperity President Tim Phillips: “This White House has accomplished many significant economic and regulatory reforms that have reduced unemployment, lowered taxes and removed barriers to opportunity for millions of Americans. Our economy is thriving despite these tariffs, not because of them. We strongly encourage the administration to listen to America’s job creators who need trade barriers reduced, not expanded.”
-Scott Wine, chairman & CEO OF Polaris Industries: “Ultimately, if this was not resolved, we would have no choice but to move production to Mexico. … This would essentially be forcing me to push jobs outside the U.S.”
-Tiffany Zarfas Williams, owner of the Luggage Shop of Lubbock in Texas: “I definitely want China to be held accountable, but I don’t know why we are punishing consumers in our own country. That’s the part that’s hard to understand as a small business owner in Texas.”
-Rick Helfenbein, president & CEO of American Apparel & Footwear Association, to CNN: “This confirms our worst fears. There are those of us who are optimists and thought it would go away and those who say it could come back at any time—and this points to the latter;” and to Fox Business: “Two-thirds of the GDP is consumer based. Ten percent of the jobs in America are retail, and in the first four months of this year, more stores have announced closings than all of last year.”
-John Bozzella, president of Global Automakers, which represents international car companies: “Our concern is, as we go back into a phase of tit-for-tat tariffs, that the auto industry would face some significant pain.”
-Cal Dooley, president of the American Chemistry Council: “The risks of continuing to use tariffs as a negotiating tactic with China are simply too high—and any potential benefits still unclear.”
-David French, senior vice president of government relations for the National Retail Federation: “American consumers will face higher prices, and U.S. jobs will be lost.”
-Lisa Hu, founder of the handbag company Lux & Nyx: “You start a business thinking you know how much things are going to cost, and then something like this comes along and changes everything. … Are these tariffs going to happen? Are they not? I’m having to make long-term decisions based on the little information I have now.”
-American International Automobile Dealers Association CEO Cody Lusk: “If President Trump follows through on his threat to place 25 percent tariffs on imported autos and auto parts, he will be directly responsible for a drastic tax increase on American consumers, which could result in a loss of 2 million vehicle sales and jeopardize up to 700,000 American jobs.”