Businesses, farmers brace for new phase in Trump trade war

https://thehill.com/policy/finance/trade/456640-businesses-farmers-brace-for-new-phase-in-trump-trade-war

Businesses, farmers brace for new phase in Trump trade war

By Sylvan Lane and Alex Gangitano - 08/08/19 06:00 AM EDT

U.S. businesses and farmers are begging President Trump for relief from his escalating trade war with China as tensions between the world’s two largest economies reach new heights. Trump’s plan to impose 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 blowback for the president.

Advocates for businesses and industries caught in the crosshairs of the 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 crunch in the last three months of the year would pose political risks for Trump and vulnerable GOP lawmakers in agricultural states seeking to ride an otherwise strong economy to reelection in 2020.
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Consumers have largely been isolated from the trade war while enjoying steady economic growth and a labor market with unemployment at historically low levels.

While Trump’s tariffs on $250 billion in Chinese goods have derailed business investment and sparked global anxiety, the targeted products are predominantly parts, materials or other components of final goods.

Trump and his aides have sought to dial up 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 said 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, a trade group representing U.S. tech manufacturers.

Wade Miquelon, president and CEO of craft store Joann Fabrics, warned on a conference call with reporters Wednesday that his company might need to cut workers or close stores if the new tariffs take effect.
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