First it was the washing machine and solar energy tariff. Then there was the steel and aluminum tariff. Next could be a broad, sweeping tariff on all goods imported from China if the White House follows through on recent promises.
And that has the retail industry extremely concerned.
In a letter cosigned by some of the largest retailers in the U.S. and the trade groups that represent them, retailers pleaded for President Trump to “do right by American families” as he considers remedial trade-related action against China. Any wide-ranging and broad tariffs imposed on goods imported from the Asian country could effectively reverse the benefits that businesses and consumers felt from recently-passed tax reform measures, retailers said.
“We support holding our trading partners accountable and using targeted trade remedies against intellectual property theft, illegal dumping or subsidies, and other proven trade violations,” the letter stated. “After all, our companies and the workers we employ thrive in a rules-based globalized economy where markets are open, trade rules and obligations are met, and governance is fair and transparent. … Yet were this investigation to result in a broadly applied tariff remedy on imports from China, it would hurt American households with higher prices and exacerbate a U.S. tariff system that is already stacked against working families.”
Some of the biggest names in the industry including Target, Best Buy, Walmart, the National Retail Federation, the Retail Industry Leaders Association, and more, were all involved with the crafting of the letter.
The White House has been fairly consistent in its messaging around trade policy—though, they have been incredibly inconsistent with the level weight of the tariffs that have been handed down. With regards to China, the White House indicated that it would consider remedial action under Section 301 of the Trade Act as part of an investigation into “unfair Chinese technology and intellectual property policies and practices.” Under that policy, the President has unilateral and discretionary action to retaliate against China, and he’s already made clear his intention to implement widespread tariffs on consumer goods, including electronics, apparel, footwear, home goods, and more.
According to the letter from retailers, any widespread tariff on basic consumer goods would only “exacerbate a U.S. tariff system that is already stacked against working families.” The U.S. levies the highest tariffs on those goods, retailers said, with import taxes as much as 32 and 67 percent on basic clothes and shoes.
“As the industry closest to consumers, retailers know firsthand how high tariffs will hurt American families,” Matthew Shay, president and CEO of NRF, said in a statement. “If the administration’s latest proposal goes into effect, Americans will see price increases on a wide range of basic products they purchase regularly at their local stores. We agree it’s time to address China’s unfair trade practices, but we can do so in a way that doesn’t destroy jobs, create uncertainty for businesses and increase every American’s cost of living.”