23 July 2019
US business groups warned in a letter to Donald Trump that tariffs on China will not be in the interests of American consumers or the broader economy. Photo: Reuters
US business groups warned in a letter to Donald Trump that tariffs on China will not be in the interests of American consumers or the broader economy. Photo: Reuters

US trade groups urge Trump to avoid tariffs against China

Forty-five trade associations representing some of the largest firms in the United States have urged US President Donald Trump not to impose tariffs on China, saying the move will hurt the American economy and consumers.

The organizations said in a letter sent to Trump on Sunday that potential tariffs on China would raise prices on consumer goods, kill jobs and drive down financial markets, Reuters reports.

“We urge the administration not to impose tariffs and to work with the business community to find an effective, but measured, solution to China’s protectionist trade policies and practices that protects American jobs and competitiveness,” the groups wrote.

“Tariffs would be particularly harmful,” they said.

The groups called on Trump to work with trade allies to push for changes to China’s policies.

The business groups said while they had serious concerns about China’s approach to trade, unilateral tariffs by the US would only separate the country from allies, and encourage them to replace the US business presence in China when Beijing retaliates.

Trade associations publicly pushing back against Trump’s tariff plans include the US Chamber of Commerce, the National Retail Federation and the Information Technology Industry Council.

The Trump administration is said to be preparing tariffs against Chinese IT, telecoms and consumer products in an attempt to force changes in Beijing’s intellectual property and investment practices.

The president recently announced plans to impose tariffs on certain steel and aluminum imports, despite opposition from some business sectors.

“We urge the administration to take measured, commercially meaningful actions consistent with international obligations that benefit US exporters, importers, and investors, rather than penalize the American consumer and jeopardize recent gains in American competitiveness,” the trade groups said in their letter.

Worries about the potential for a US-China trade war and frustration over Trump’s steel and aluminum tariffs are likely to dominate discussions during a gathering of G20 finance leaders in Buenos Aires this week.

US Treasury Secretary Steven Mnuchin, who will attend a two-day meeting of the Group of 20 finance ministers, is expected to defend Trump’s trade plans against widespread global criticism.

But he is likely to hear pleas for exemptions from the steel and aluminum tariffs.

The US import tariffs of 25 percent on steel and 10 percent on aluminum, set to become effective on March 23, have raised alarms among trading partners that Trump is following through on his threats to dismantle the decades-old trading system based around World Trade Organization rules in favor of unilateral US actions.

Potentially broader anti-China tariffs and investment restrictions under consideration as part of a US intellectual property probe have raised concerns that retaliation could seriously diminish global trade and choke off the strongest global growth since the G20 was formed during the 2008 financial crisis.

Reuters reported last week that the Trump administration was considering punitive tariffs on some US$60 billion worth of Chinese information technology, telecoms and consumer products annually.

Several G20 officials, including the finance ministers from host country Argentina and Germany, said they will insist on maintaining G20 communique language emphasizing “the crucial role of the rules-based international trading system.”

An early draft of the G20 communique seen by Reuters contained that phrase and added: “We note the importance of bilateral, regional and plurilateral agreements being open, transparent, inclusive and WTO-consistent, and commit to working to ensure they complement the multilateral trade agreements.”

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