U.S. Trade Representative Jamieson Greer is investigating whether President Trump should impose new tariffs. The importer and manufacturer asserted their respective claims.
President Trump talks about tariffs in State of the Union address
In his State of the Union address, President Trump called the Supreme Court’s decision on tariffs a “disappointing decision.”
WASHINGTON – Bicycle importers already say they can’t match Chinese prices with U.S. manufacturers. Companies that import cheese from Europe say the new tariffs will “cause lasting damage”. A company that imports Cambodian infant sleeping bags also claims that the additional tariffs will have a “terminal” effect.
President Donald Trump had threatened to impose tariffs that companies felt could be a death sentence for them until the Supreme Court revoked his emergency mandate in February. Now, those fears are rising again.
Following the Supreme Court’s sweeping ruling, U.S. Trade Representative Jamison Greer is investigating whether new tariffs are necessary under the Trade Act of 1974.. The goal is to combat unfair trade practices that burden or restrict U.S. businesses.
But not everyone is against it. For example, U.S. ceramics, medical supplies, and clothing manufacturers support the idea of new tariffs to combat unfair trade practices in countries such as China and India.
Public comment deadline is April 15th, And nearly 300 people rushed in advance. Hearing on forced labor charges scheduled to begin April 28; Another hearing on allegations of overproduction for export to other countries is scheduled to begin on May 5.
What are the arguments for and against tariffs?
A year ago, President Trump announced a massive tariff plan that would impose tariffs ranging from 10% to 50% on trading partners around the world and even uninhabited islands. He argued that tariffs are necessary to raise government money, force countries to negotiate new trade deals and force companies to relocate manufacturing in the United States.
But the Supreme Court ruled in February that he did not have the authority to impose tariffs under the International Emergency Economic Powers Act of 1977. Customs and Border Protection is considering ways to refund the roughly $165 billion it collected last year.
President Trump imposed a temporary 10% tariff that would last only for 150 days, arguing that he could get what he wanted under other laws. The other option for permanent tariffs is up to Mr. Greer’s investigation.
The agency argues that manufacturing industries in countries such as China and Europe “pose a significant challenge” to U.S. jobs because they produce more than their own countries need. This excess manufacturing capacity is said to have resulted in increased exports from each country, flooding the market with products and harming U.S. producers.
Mr. Greer also investigates forced labor in other countries, which provides unfair advantages through low costs. The International Labor Organization estimates that 28 million people are working in forced labor in 2021, leading to cost benefits for industries such as clothing manufacturing and agriculture.
“Made in America policy is about encouraging companies to invest and build in America, and bringing jobs and production lines back home,” Greer said on April 2, the anniversary of President Trump’s emergency tariffs.
But critics of potential tariffs argue that foreign companies offer products that cannot be made or grown at the same cost in the United States. Business associations also say they are increasing labor monitoring to avoid exploitation of involuntary workers.
The head of Learning Resources, which imports toys and educational materials and won a Supreme Court case against emergency tariffs, opposed new tariffs on imported goods. CEO Richard Waldenberg said imposing various tariffs under the 1974 Trade Act would be a “disguise” of the law because “the decision to impose these taxes has already been made.”
“Taxes on our companies will lead to job destruction and reduced growth opportunities in America,” Waldenberg said.
Small importers say new tariffs are ‘apocalyptic’ and ‘could cause lasting damage’
Importers opposed to the new tariffs argue that other countries offer products more affordable to manufacture than the U.S., or that they are specialty products from other countries.
Radio Flyer, the Chicago-based company that makes the iconic little red wagon, is also expanding into bicycles, scooters, and electric bikes imported from China. But Radio Flyer chief wagon officer Roger Pasin said the tariffs on bicycles and parts would hurt the company, which is already hampered by changing household spending priorities and inflation.
“Additional tariffs will not encourage domestic production of these products in the United States; they will simply increase prices for American households,” Pasin said.
Ely Kakshouri, CEO of Retrospec, which imports bicycles and parts, said the Perris, Calif.-based company, which has 60 employees, is already facing headwinds from a sharp drop in demand due to the coronavirus pandemic. Tariffs on bicycles could drive up prices and further drive away customers, he said.
“Our mission is to make it easy for anyone to get out and ride a bike,” Kakshouri said. “Tariffs that prohibit people from biking are antithetical to that mission.”
Tavis Malcolm, founder of Morrison Outdoors, which imports infant sleeping bags from Cambodia, said his company moved production out of China to work with countries that have trade deals with the United States.
But he said the additional tariff would be “redundant and terminal for small businesses” because the company already pays a 29% fee.
Laura Lyden McGregor, owner of Peterson Co., which imports cheese and butter from Britain, Switzerland and the European Union, said tariffs on dairy products would hurt an industry that already has limited imports and a trade surplus.
For example, cheddar cheese already faces weight restrictions and import fees, McGregor said. Mr. McGregor’s third-generation family business has 250 employees and warehouses in three New Jersey areas: Auburn, Washington and Moonachie. Cheese imports account for less than one-tenth of total US imports.
McGregor said tariffs on cheese and dairy products would “cause lasting harm” to American businesses, and that they “should not be drawn into any tariff action as a convenient tariff item.”
‘Direct, documented, tough’: U.S. manufacturers complain of unfair trade from China, India and more
Some industries, including makers of ceramics, clothing and medical supplies, welcome the additional tariffs to stem unfair competition from abroad.
Hector Narvaez, executive vice president of Stonepeak Ceramics in Crossville, Tenn., said tariffs or import quotas are needed because “the entire U.S. ceramic tile industry is in crisis.”
India’s ceramic tile imports have soared to almost 24 times the 2018 pace by 2023, according to the North American Tile Council, an industry group. The group claims that the subsidy system allows tiles to be produced in India for 75 cents per square foot, compared to $1.86 in the United States.
“In the face of a surge in cheap ceramic tile imports from India, the fate of our company and the families that depend on us is now uncertain. The tiles are targeted at the U.S. market and are priced so low that they are sold well below the cost of production for U.S. manufacturers,” Narváez said.
Walter Johnsen, CEO of Shelton, Conn.-based Acme United, said tariffs and other trade measures could help combat unfair trade in first aid supplies from China and India.
Acme employs 400 people in the U.S. and makes products such as alcohol prep pads, antibiotic creams and hand sanitizer. But China produced far more than it sold at home, thanks to what Johnsen called “extensive state subsidies.”
China will export $1.3 billion of products such as gauze and bandages in 2024, accounting for about a quarter of the world’s total, Johnsen said. India also exports products at “relatively cheap” prices, he said. Mr. Johnsen said Acme supports Mr. Greer in using trade law “to address these distortions.”
James Poole of Obelisk Tech Systems argued that countries such as Bangladesh and China offer tax breaks, land grants and below-market loans to support clothing manufacturers, which are “unfair and discriminatory” under U.S. law. Cambodia benefits from China’s supply chain in garment manufacturing, Poole said.
“The burden on U.S. commerce is direct, documented, and severe,” Poole said.
Companies argue that tariffs are more complicated than setting a flat rate on imports from each country.
While President Trump has imposed broad tariffs in the past, industry advocates say there are details that Mr. Greer should consider when considering new tariffs.
Despite Europe’s trade surplus with the US, shoes are heading in the opposite direction. Carmen Arias, director general of the European Footwear Industry Federation, said the continent imports nearly seven times as many shoes as it exports, totaling 1.8 billion pairs worth around 6.8 billion euros.
“These figures clearly show that the EU is not characterized by oversupply, but is structurally dependent on imports,” Arias said.
Kathy Abel, CEO of Sun Valley, Idaho-based Wildry, which makes technical apparel for skiing, mountain biking and other outdoor recreation, said she turned to Chinese suppliers after trying to make her clothing in the U.S. had flaws.
Mr. Abel argued that there is a shortage, not an excess, of manufacturing specialty clothing like Wild Rye. The company is exploring options in Vietnam, Italy and Albania after suffering an unexpected $500,000 burden in customs duties and shipping costs last year, but the transition could take several years, he said.
“The current tariff environment is already placing a significant strain on our business and, by extension, U.S. commerce,” Abel said.
US industry calls for action against forced labor in Asia
The Ministry of Labor has determined that China’s Uighur region relies on forced labor to produce cotton and textile products. The materials from China will eventually be used in clothing produced in Cambodia, Indonesia, Malaysia and Vietnam, the ministry said.
Kent Kaiser, executive director of the Prosperity Trade Alliance, said China’s failure to adopt and enforce a ban on imports of products produced with forced labor justifies the U.S. imposition of restrictions and fees on its products.
The National Council of Textile Organizations supports tariffs on China and other Asian countries that rely on forced labor, saying “the effects of low-cost raw materials and finished products made with forced labor ripple throughout the supply chain.”
The U.S.-Taiwan Economic Council acknowledged that it is difficult to track working conditions in industries that rely on migrant workers and intermediaries, particularly fishing and textile manufacturing.
But the council said Taiwan is committed to making labor union organizing more streamlined within two years and banning the imposition of labor fees on migrant workers within three years.
“Taiwan’s surveillance and enforcement system is clearly not fully mature and its products pose real risks related to forced labor,” the council said.
