Damage Will ‘Pile Up’ if Trade War Doesn’t End Soon, Say Big-Box Retailers
The trade group representing big-box retailers used President Donald Trump’s own words about tariffs’ possible harm to holiday shopping to urge his administration not to raise the first three rounds of Section 301 duties on Chinese goods to 30 percent as planned for Oct. 15 (see 1909120002). Trump “acknowledged that tariffs hurt consumers” when he deferred putting the List 4B tariffs into effect until Dec. 15, commented the Retail Industry Leaders Association in docket USTR-2019-0015, citing the president’s Aug. 13 remarks (see 1908130028).
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Retailers “appreciate” Trump’s “desire to at least partially shield consumers from a holiday shopping season marred by tariffs,” said RILA. But “we remain concerned that if this trade war is not resolved soon, the economic damage will start to pile up and American families will be the ones left paying the bill,” it said.
RILA’s retail members “have been working to modify their sourcing strategies in response to tariffs, but the supply chain can only move so fast, or absorb so much,” said the association. “For many products, we have no other option other than to source from China,” which is “by far a top supplier of many consumer products,” it said. “Shifting current sourcing patterns would significantly disrupt the flow of trade and raise costs on everyday essentials.” Moving production away from China “to avoid the tariffs is costly, takes time, and poses additional risk to supply chains in terms of compliance, capacity, and logistics,” said RILA.
CTA’s “rationales” for opposing the tariffs “have only strengthened with the passage of time since the imposition of the original tariffs on Lists 1, 2, and 3,” commented the association. Since July 2018, “these tariffs have cost the consumer technology industry and its consumers -- not China -- more than $10 billion,” it said. That includes more than $1 billion in tariff payments “on 5G-related products alone, hindering the U.S. in the critical global race for 5G technology and technical superiority,” it said.
For 2019's holiday quarter, the industry “expects to pay an additional $7 billion to account for tariffs on new products,” said CTA. “This will force consumers to pay even more for their holiday gifts than they would have previously.” The administration’s “unpredictable” tariff policy is “also already having negative economic consequences,” it said. “Continuous threats of more tariffs and occasional promises that trade talks are progressing mean whiplash for global stock markets.”
Tariffs create “a negative chain reaction” for the consumer tech industry, commented the Information Technology Industry Council. The administration claimed it acted “to avoid placing tariffs on consumer products” when it imposed the first three rounds of 25 percent duties, but “there is simply no way to protect consumers from tariffs on $200 billion worth of goods,” said ITI.
Hiking the duty rates to 30 percent “would only cause additional harm to U.S. consumers, cost U.S. jobs, and undermine U.S. technology companies in the fight for global leadership,” said ITI. “The proposed increase of tariffs on products from Lists 1-3 specifically affects” a wide variety of consumer products, including smart appliances and virtual-reality headsets, it said.
The “particularly broad” assortment on List 3 of “transmission devices” imported from China under the Harmonized Tariff Schedule’s 8517.62.00 subheading “captures all smart or interconnected devices that respond to or reproduce any voice or image data,” said ITI. Raising tariffs to 30 percent on those goods “will have broad implications, as all telecommunications equipment relies on gateways, modems, optical transceivers and routers,” it said. Those are “the primary devices that enable internet connectivity among households and businesses alike,” it said.