Trump Tweets Tariffs To Increase To 25 Percent On May 10
On Sunday, President Trump sent out a series of tweets announcing that tariffs on $200 billion worth of Chinese imports would increase from 10 to 25 percent this Friday, and all remaining Chinese imports would soon be taxed at 25 percent.
The unexpected announcement followed reports last week that negotiations by U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, who took part in the talks in Beijing, were close to completion and that the two sides had agreed on a schedule to remove some of the tariffs. Chinese Vice Premier Liu He is scheduled to arrive in Washington D.C. this week for what is anticipated to be the last round of trade talks before a deal is announced. He was originally scheduled to arrive on Wednesday, but those plans may be in flux.
“We have enough pressures on our industry from cost perspectives and a regulatory standpoint, these tariffs aren’t going to help us,” says Leeton Lee, president of ComplyBox Consulting and chair of the PPAI Product Responsibility Action Group. “The tariff increases are going to cause additional costs to our industry and those costs will likely be passed on to our customers and ultimately the end buyers. There’s no way but to think that this will have a negative impact on our companies and our industry. It’s adding a cost layer that most of us feel is unnecessary.”
Larry Whitney, director of global compliance at supplier Polyconcept, adds, “The effects of the tariffs won’t be immediate. Pretty much everyone in this industry has a warehouse we’re working through, that came in under the 10 percent tariffs. But at some point, we’ll be dipping into that inventory and prices will reflect that.
“We’ve tried to mitigate some of the impact of the tariffs so far and our team will be looking at pricing to figure out a way to moderate this as well. But a 25 percent tariff is definitely not something that’s going to go quietly. We’ll find out on Friday. For suppliers, it means that goods that arrive on Saturday will be subject to this new higher tariff. And if the President follows through and levies tariffs on the remaining Chinese imports, virtually everything our industry imports from China will have a 25 percent tariff.”
Tariffs Hurt The Heartland—a nationwide campaign against tariffs supported by the coalitions Farmers For Free Trade and Americans For Free Trade, of which PPAI is a member—issued a statement following the President’s announcement, saying, “For 10 months, Americans have been paying the full cost of the trade war, not China. To be clear, tariffs are taxes that Americans pay, and this sudden increase with little notice will only punish U.S farmers, businesses and consumers. … If the President follows through on this threat, the consequences will be dire. Raising tariffs to 25 percent could cost nearly one million American jobs, according to recent estimates. This decision will also roil financial markets and increase the likelihood of retaliation on American farmers who are facing the lowest income levels in years.”
Research cited by Tariff Hurt The Heartland notes that a tariff increase to 25 percent, coupled with tariffs already in place and retaliation, could cost more than 934,000 jobs and reduce the U.S. GDP by 0.37 percent. A recent study from the Federal Reserve Bank of New York, Princeton University and Columbia found that current tariffs have reduced U.S. income at a rate of $1.4 billion per month by the end of November.