The Journal Gazette
Tuesday, June 18, 2019 1:00 am

US, China firms face risk

Alarm growing amid threats of further taxes

PAUL WISEMAN | Associated Press

WASHINGTON – U.S. businesses are imploring President Donald Trump not to expand his tariffs to $300 billion in goods from China that have so far been spared in his trade war with Beijing.

These companies warn that the additional tariffs would drive up prices for consumers, squeeze profits and leave U.S. companies at a competitive disadvantage to foreign rivals that aren't subject to higher taxes on the components they buy from China.

In the meantime, American businesses, trade groups and individuals are pleading with the administration to drop its threat to tax the remaining Chinese imports that Trump hasn't already hit with tariffs – or at least spare the particular imports that they and their customers rely on. Some are appearing in person to air their grievances in seven days of hearings in Washington that began Monday.

U.S. Trade Representative Robert Lighthizer is sure to hear more complaints when he goes to Capitol Hill. Lighthizer is to testify today to the Senate Finance Committee and Wednesday to the House Ways and Means Committee. Lawmakers from both political parties have been increasingly inclined to speak out against Trump's aggressive use of tariffs. 

A common theme in their pleas is that American businesses – not China, as Trump often asserts – must pay the import taxes the president is imposing on Chinese goods. And in the end, many of these companies will pass their higher costs on to their customers.

If Trump does expand his tariffs to all remaining goods from China, it could prove costly.

A report commissioned by the National Retail Federation found that American consumers would pay an additional $4.4 billion a year for clothing, $2.5 billion more for shoes and $1.6 billion more for household appliances.

Trump has already imposed 25% tariffs on $250 billion in Chinese imports.

The goal is to pressure Beijing to stop stealing American technology, forcing U.S. businesses to hand over trade secrets and unfairly subsidizing Chinese tech companies.

Eleven rounds of negotiations have failed to resolve the dispute over China's aggressive drive to surpass America's technological dominance.

Businesses and investors say they hope the negotiations will gain momentum if Trump and President Xi Jinping hold a face-to-face meeting at a Group of 20 summit in Osaka, Japan, in two weeks.

“Most businesses are almost praying for a solution,” said Patrik Berglund, who tracks global trade as the CEO of Xeneta, an Oslo, Norway, firm that provides data on the shipping industry. “These things will have enormous consequences.

“We're so connected in this global world.”

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