WASHINGTON: The Trump administration is expanding the battlefield in its trade fight with China, moving beyond industrial goods to threaten tariffs for the first time on a range of consumer products that illustrates how dependent the U.S. consumer economy is on imports.
The $200 billion in products under consideration for a new 10% duty includes bicycles, sound systems, refrigerators, pocketbooks, vacuum cleaners, cosmetics, tools and seafood.
“They’re not only hitting consumers’ wallets, they’re literally hitting wallets,” said Jonathan Gold, vice president at the National Retail Federation, whose members rely heavily on low-cost Chinese products. He was referring to the inclusion on the tariff list of “travel goods,” a category that includes wallets as well as luggage. The American Apparel & Footwear Association estimates that over 80% of that $31 billion sector comes from China.
China’s Commerce Ministry said Wednesday the country “has no choice but to take necessary countermeasures.” China doesn’t import enough from the U.S. to match Washington dollar for dollar with tariffs as it has in previous rounds, so Beijing is reviewing plans to hit back in other ways, said Chinese officials familiar with the discussions.
Measures are likely to include holding up licenses for U.S. companies, delaying approval of mergers and acquisitions involving U.S. businesses and ramping up inspections of American products at China’s borders, the officials said.
The wide range of products under consideration for the U.S. tariffs disclosed Tuesday—a 195-page list starting with “frozen retail cuts of meat of swine” and rolling through “ice hockey gloves,” “carpets and other textile floor coverings” and “sewing machines”—shows just how much the U.S. looks to China for consumer goods, as the world’s most populous economy has developed into the world’s factory floor.
Still, the main targets in this round remain industrial products, such as semiconductor-related goods and telecommunications equipment.
The potential pain from disrupting the U.S.-China relationship has prompted a growing backlash within President Donald Trump’s own Republican Party over his trade policies, with the Senate holding a vote Wednesday to try to curb his broad powers to curtail imports.
Many lawmakers are growing nervous, as Mr. Trump pressures both Beijing and allies in Europe. During a contentious NATO summit Wednesday in Brussels, the president demanded that Germany and others pay more for their defense to ease the financial burden on the U.S. He hinted the U.S. could rupture their 70-year postwar alliance if they didn’t pay up.
In its escalating commercial conflict with Beijing, the Trump administration has so far tried to steer away from actions that would trigger obvious sticker shock on store shelves, focusing mainly on industrial components that would take months, if ever, before affecting the final price of goods.
That strategy, however, is proving increasingly difficult to maintain, as Mr. Trump doubles down on efforts to pressure China to alter its trading policies and practices, vowing to counter any Chinese retaliation with even bigger retaliation of his own.
“The first set of tariffs was civilized in terms of our industry,” said Rick Helfenbein, head of the apparel trade group. “This one is a deviation—we’ve been smacked right on the head.”
A senior administration official said in unveiling the list Tuesday night that “we did try to take into account the potential impact on consumers.” He added that the goal wasn’t to raise the price of imports but “to encourage China to change its behavior.”
As Mr. Trump subjects a growing portion of the American economy to import restrictions—and the threat of countermeasures by trading partners against American exports—the Senate voted 88 to 11 Wednesday on a motion aimed at curbing the president’s broad powers to impose tariffs.
The vote was mainly symbolic, since the measure wasn’t binding and offered a vague plan requiring “a role for Congress” in certain tariff decisions. Still, that Senate leaders allowed a rare vote on a measure attacking an administration action, the first over trade, was “a clear rebuke of this administration’s trade policy,” said Arizona GOP Sen. Jeff Flake, one of Mr. Trump’s strongest Republican critics.
The new $200 billion import target list is the latest step in Mr. Trump’s trade battle with China, launched earlier this year after a monthslong administration investigation concluded that the Chinese government and Chinese companies had systematically and improperly pressured U.S. companies to turn over valuable intellectual property.
As punishment for those practices, Mr. Trump imposed 25% tariffs on $34 billion in Chinese imports on July 6, and has scheduled another $16 billion will get hit later this month.
China swiftly retaliated by imposing its own tariffs on U.S. imports, and the new $200 billion list from the administration is intended as counter-retaliation. Those tariffs wouldn’t be imposed until after public hearings scheduled for late August.
Mr. Trump has said he is willing to impose tariffs on yet another $200 billion of Chinese imports if Beijing retaliates again—which would mean the vast majority of what the U.S. buys from China would be hit by duties. China sent $523.7 billion in products to the U.S. last year.
Even under the new tariff list, the biggest categories of Chinese consumer-product imports have been spared. The list doesn’t mention smartphones such as iPhones or televisions. Finished shoes and clothing aren’t included—about 70% of the U.S. footwear market is made up of Chinese imports. Neither are pharmaceuticals or medical devices.
“The administration’s new tariff list includes routers, switches and other telecom goods that are essential components of the network and to deliver connectivity,” said Cinnamon Rogers, senior vice president of government affairs at the Telecommunications Industry Association. She said those tariffs “will inflate the cost of internet access for American business and consumers,” and also hit “vital infrastructure in new tech like cloud services,” putting the U.S. “at a competitive disadvantage relative to China.”
Many trade groups representing affected industries said they were still poring over the list to assess what the impact would be, in particular whether U.S. trade officials had made good on pledges to focus on products that could be sourced from other countries, or whether the new costs on Chinese goods would be more disruptive.
While marquee consumer electronics goods still don’t face new tariffs, large numbers of products still could be affected. Sage Chandler, vice president for international trade at the Consumer Technology Association, said products on the list sold by her group’s members include Bluetooth speakers, amplifiers, surge protectors and cables that connect computers and other electronic equipment.
Various home products are also on the list, including flooring materials, hammers, screwdrivers, refrigerators and vacuum cleaners. The possible targets also include a long list of cosmetics, perfumes, bath salts and soaps.
A number of auto parts are also included, such as car seats, floor mats and gaskets.
The list also names seafood such as tilapia, salmon, cod and tuna. The U.S. imported $2.7 billion of fish and seafood from China last year, according to federal data. Consumers might see prices rise, said John Connolly, president of the National Fisheries Institute trade group.
Mr. Connolly said U.S. seafood producers are contending with China’s retaliatory tariffs on Maine lobsters, squid from New Jersey and California, and cod, pollock and salmon from Alaska, raising concern about lost sales. - WSJ
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