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.

filed under May 2019 | Tariffs
Read time:
Comments (3)
Beth Moodie
June 3, 2019
In response to Mitchell, China owns a significant amount of US debt. If China were to call in their debt today, we would be a bankrupt nation. Besides from that, tariffs are local taxes assessed against local US businesses importing goods into the United States. These are taxes paid to our government. Even if it was the opposite case in which China or Mexico etc is paying the US tariffs (which is not true) then the cost for those countries would increase. Said cost would then be transferred to US buyers. Any side of the coin would impact our business. Suppliers have built up long term relationships with manufacturing partners in China. It is not that simply to disrupt that chain supply and move to another country or close down our operations until the tariff battle ends. It is not feasible to sell a pen for $0.99 and have it manufactured in the US unless we are going to use imprisoned labor. US businesses have to pay at least the federal minimum wages plus payroll taxes, electricity, insurance, mortgage/rent etc. The bigger question is will there be a promotional products business once this nonsensical tariff is over? Not many distributors are even aware of the impact that this tariff is creating. They are still asking for discount on small volumes without recognizing that cost on said products have increased since last year and who to tell how many more will be added in 2019-2020. Our industry has been thriving and we want it remain that way. The apprehension of what is to come is what is alarming. Thanks PPAI for keeping the message in the public.
robert breeding
May 20, 2019
it is not Chinas fault there are no more tube sock machines in the US. Blame US manufacturers for moving their plants. Stockholders for demanding more and more returns. Politian's for not being honest enough and strong enough to call China out or demand a fairer playing field.
Mitchell Bublitz
May 8, 2019
Tariffs are a tool governments use to increase or decrease sales to a country. China has been putting tariffs on USA products for years. This has led to a negative trade balance in China's favor. If the US was to allow this to continue the US will be owned by China. Maybe the USA should have stuff made in Mexico rather than China. Help our neighbor to the south, give them the work rather than China. Lessen the need for the Mexican people to migrate to the USA.
Leave a reply