U.S. businesses and farmers are pleading with President Trump for relief from his escalating trade war with China. This is taking place even as tensions between the world’s two largest economies reach new heights.
Trump’s plan to enforce a 10 percent tariff on more than $300 billion in Chinese goods, and China’s decision to suspend U.S. agricultural imports, sets the stage for potential economic and political damage for the president.
Advocates for businesses and industries in the thick of this yearlong U.S.-China trade war are bracing for damage, warning Trump’s new tariffs could force them to hike prices or lay off workers during this year’s holiday shopping season.
An economic downturn in the last three months of the year would create political risks for Trump and vulnerable GOP lawmakers in agricultural states seeking to ride an otherwise strong economy to reelection in 2020.
“We’re at a very dangerous pivot point,” said David French, president and CEO of the National Retail Federation. “These are things that are going to have a real everyday impact for American consumers.”
Trump and his aides have attempted to increase pressure on China to strike a deal as they shield U.S. consumers from higher costs. But the president’s new tariffs, slated to take effect Sept. 1, would cover a wide array of consumer goods ahead during a crucial stretch for the U.S. economy.
“So far the ripple effect has not been felt by consumers in prices at Walmart or wherever,” said Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics in Washington. “As we go to the next installment of tariffs, that will surely show up in prices.”
French indicated on Wednesday that starting next month, American consumers would pay $4.4 billion more each year for apparel, $2.5 billion more for footwear, $3.7 billion more for toys, and $1.6 billion more for household appliances.
Tariffs on consumer electronics would rise to roughly $2.7 billion if Trump goes through with the new import taxes, according to an analysis published Wednesday by the Consumer Technology Association.
Jay Foreman, chief executive of Florida-based toy company Basic Fun, said that some of his firm’s retail partners plan to raise prices by 10 to 20 percent during the holiday season.
“Mr. Trump may decide he doesn’t want to be ‘The Grinch Who Stole Christmas,’ Foreman said, “but we’re not betting on it.”
“The trade war has been in full swing for more than a year and shows no signs of abating. Farmers have lost the vast majority of what was once a $24 billion market in China and stand to lose it all if recent statements prove to be true,” a spokesman for the American Farm Bureau told a media outlet.
The spokesman said that “nearly every farmer” the group works with has expressed concern.