Last month, the Biden administration announced it is beginning the process of reviewing the tariffs that former President Donald Trump put on hundreds of billions of dollars worth of imports from China. Once that review is done, the Administration will face an important decision over whether to continue these tariffs that are harming businesses throughout the country – a decision made much more serious given the ongoing problem of rising inflation.
The reason this decision is so big is simple: despite claims that the tariffs – which are taxes the government places on importers – have been paid by the Chinese, the truth is that they’ve been paid by American businesses and consumers.
As a study by Moody’s revealed last year, American businesses have been on the hook for more than 90 percent of the cost of the tariffs. Since the tariffs were put in place during the last administration, American businesses, manufacturers, farmers, and consumers have paid more than $140 billion in taxes to the federal government.
Any continuation of these tariffs is essentially a tax hike. It’s a burden that’s especially heavy for small businesses, and not many people have a full grasp of what they've endured over the last four years. Materials, equipment, and more that companies need just to operate day-to-day have been coming with a tax as high as 25 percent ever since the start of the trade war with China.
For small businesses, that means thousands of dollars extra that they simply can’t afford. And after going through the trouble to cultivate trustworthy relationships with overseas suppliers to ensure quality goods for the consumer, picking up and moving isn’t always an option, especially when there often aren’t any U.S.-based alternatives for the goods businesses need.
While there was a tariff exclusions process in place – and a much more limited one was reintroduced earlier this year – it wasn’t accessible for the businesses that needed it most. The process was long, arduous, and too expensive for many businesses, and even those that got through it were denied more often than not. My own business, which manufacturers lighting and supply products for trade shows, displays, and more, was denied on every single tariff exclusion request we filed.
Our industry couldn’t easily adapt to the COVID-19 pandemic, so those costs were even harder to withstand. We were among the first to shut down when the pandemic began and have been among the last to recover as it’s receded. We couldn’t just switch over to a take-out model or rely on online alternatives. Even still, we had to keep paying the enormous tax these tariffs created.
That’s why, as the Biden administration works on this tariff review process, I and thousands of other business owners across the U.S. will be hoping President Joe Biden and United States Trade Representative Katherine Tai do the right thing and finally remove these tariffs. They’ve been an enormous cost burden and it’s only getting worse as businesses struggle against inflation.
The longer these tariffs are left untouched, the greater the responsibility that falls on the Biden administration for the harm the tariffs create. Four years into the trade war, the evidence has been clear time and again that these tariffs are taxes on U.S. businesses, and that they hurt American companies and families most. It’s time for the Biden administration to listen to that evidence and put an end to the trade war.
