Americans for Free Trade, a coalition representing 163 trade associations, including PPAI, and every part of the U.S. economy, has sent a letter to the United States Trade Representative (USTR) to oppose the proposed October 15 increase of the China 301 tariffs on lists one through three from 25 percent to 30 percent. While the coalition acknowledges that China and other trading partners must be held accountable for trade violations, the use of broadly applied tariffs has not resulted in a change in policy and is continuing to harm U.S. businesses, workers and consumers.
The coalition’s data, drawn from the U.S. Census Bureau, shows that U.S. businesses paid an additional $6.8 billion in tariffs in July 2019. The letter notes, “We continue to hear and see story after story about the negative impacts of the tariffs on businesses large and small. Because of increased costs and ongoing uncertainty surrounding the U.S.-China trade relationship, many companies are being forced to hold back on planned investments, refrain from hiring new employees or pass along price increases to their customers. While the economy remains strong, there continue to be clouds on the horizon that could result in further weakening.”
The letter, sent as part of the public comment period on the proposed October 15 increases, also says, “USTR asks specifically whether or not the additional duties would be ‘practicable or effective’ to obtain the elimination of China’s acts, policies and practices, and whether increasing the tariff rate would cause disproportionate economic harm to U.S. interests, including small- or medium-sized businesses and consumers. To date, the tariffs have not been a practicable or effective tool in obtaining changes to China’s acts. We do not believe an increase of five percent, or any other increase that may be planned, will be effective. However, we do believe the planned tariff increase, or any other, will cause economic harm to U.S. interests. This is especially true of small- and medium-sized businesses that bear the brunt of the tariff increases. These companies especially have less flexibility to mitigate the impact of the tariffs by shifting sourcing, absorbing the tariff or passing the tax increase on to their customers.
Polling shows that support for the tariffs is eroding. A survey by Fox News found that 45 percent of Americans say they are hurting the country, compared to 31 percent who say they help. Americans for Free Trade spokesman Jonathan Gold says, “Now that so many of these tariffs have begun to take effect, Americans across the country and from every walk of life are feeling their impact—and they aren’t pleased, as this poll shows. It’s time to end the tariffs and find a different way to hold China accountable that doesn’t punish American businesses and consumers.”
On September 11, President Trump postponed the next planned tariff increase from October 1 to October 15 on $250 billion in Chinese imports scheduled to rise from 25 percent to 30 percent. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are expected to resume face-to-face talks with Chinese representatives next month.
