Big and Small Say 'Thanks But No Thanks' to Tariffs

Big and Small Say 'Thanks But No Thanks' to Tariffs
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Architects of the Trump administration’s trade war with China asked businesses to comment on it. Yesterday, the U.S Trade Representative got an earful. It turns out that the people the protectionist policy was designed to protect don’t want to be protected.

The view of dozens of companies and trade organizations reflects the simple fact that no one can win a trade war, not the country that initiates it and not the country that retaliates, and the Administration’s proposed tariff hike on $300 billion worth of Chinese goods - over and above the tariffs in place - would only add fuel to a dumpster fire that is already burning the U.S economy.

Interestingly, the large volley of corporate opposition was directed virtually exclusively at the cost of the U.S tariffs - never mind the cost of potential retaliatory measures. Moreover, respondents were virtually unanimous in saying that the cost of the tariffs would be borne not by China, but by American companies and consumers.

The U.S Chamber of Commerce - the voice of business - was a voice of sanity in urging the Administration not to impose additional tariffs. But opposition to the policy came from businesses big and small.

Not surprisingly, it seems that everybody wants to be left off the list of protected goods. Kenneth Cole Productions warned that a 25 percent tariff would force the company to raise prices and reduce investment in both its workforce and its infrastructure. Ralph Lauren asked for apparel and footwear to be removed, arguing that a rise in duties would reduce sales and lead to American workers losing American jobs.

Best Buy pointed to the “inefficiency of the proposed tariffs” - and asked that laptops, cell phones, smart watches, televisions and gaming consoles be left off the tariff list. In other words, don’t raise tariffs on anything we import from China.

Opposition also came from companies with a lower profile.

The fireworks company Spirit of 76 - which imports all of its product from China - said the tariffs would cause significant harm to its business, which depends on narrow profit margins. The result? The company said it would have to raise its prices, impinging on hiring and expansion.

The Portable Lights Association warned the proposed tariffs would increase the price of flashlights and other portable lighting. The trade group pointed out there is “very little production capacity in the U.S and there us almost no industry infrastructure to turn to in an expeditious manner.”

Big companies oppose the tariffs. Small companies oppose them. They all agree that their cost would be borne by American workers and consumers. The inputs sourced in China are generally not available in the United States. And, while no company or organization pointed this out, if domestic entrepreneurs were to pick up the slack by building new industries, that would only re-route industrial, financial and human capital that is already being deployed by U.S companies - with more value added.

What protectionists don’t seem to grasp is that the opportunity to import is a big competitive advantage - one that shouldn’t be foregone lightly. That is why the people who are supposedly being protected are saying thanks but no thanks.

Allan Golombek is a Senior Director at the White House Writers Group. 

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