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Fill me in: The Trump administration imposed a 25% tariff on $50 billion worth of Chinese imports as a result of its investigation into China’s forced technology transfer and intellectual property practices. The tariffs came in two batches: the first batch totaled $34 billion and went into effect on July 6, and the second batch totaled $16 billion and went into effect on August 23. China immediately retaliated in kind against U.S. farmers and manufacturers with tariffs on $50 billion of American-made goods.
Why does it matter? It will hit American consumers and businesses–including manufacturers, farmers, and technology companies–with higher costs on commonly used products and materials, and as a result, it stands to slow the United States’ recent economic resurgence. The move is the latest in a string of potentially economically crippling trade developments, including new tariffs proposed or implemented on steel, aluminum, cars, and auto parts.
Number to know: 134,000. That’s the number of American jobs threatened by the tariffs on China, according to a study commissioned by the Consumer Technology Association and the National Retail Federation.
Our take: “The administration is right to hold China accountable, but a trade war risks taking the starch out of the U.S. economy, which runs on pro-growth policies that grow paychecks and create new jobs. That’s not what tariffs deliver. American consumers are already paying the costs of tariffs, and those costs will nearly double if an additional $200 billion in new tariffs are imposed. There are other ways to truly achieve free and fair trade with China. As the U.S. and China take their seats at the negotiating table, it’s critical they focus on finding those solutions to address China’s unfair trade practices for the long term.” – U.S. Chamber President and CEO Tom Donohue
What’s next? The administration has threatened to slap additional tariffs up to 25% on $200 billion worth of Chinese goods, and the president pledged to pursue additional tariffs if China retaliated. In sum, tariffs on China alone could total $250 billion or more. China reacted to the potential $200 billion escalation by calling the announcement “totally unacceptable” and vowing to retaliate with $60 billion worth of tariffs on U.S. products. According to a new NRF study, that move would cause consmers to pay between an additional $2.1 billion and $4.6 billion for furniture and bwetween an additional $578 million and $1.2 billion for travel goods.
This week USTR is holding 6 days of hearings at which over 300 witnesses are testifying against the tariffs.
These are the latest development in an escalating trade war that is already having damanging effects on American consumers and businesses. Hear from the farmers, manufacturers, and others that are already feeling the impact.
- Wall Street Journal: China, U.S. Fire Off New Tariffs in Middle of Trade Talks
- CBS News: Trade war with China will hurt U.S. in 2019: Moody's