PoliticsBusiness groups to Trump: Tariff delay isn't enough
Trump's Threatened Tariffs Could Cause Recession in 9 Months if Implemented, Morgan Stanley Warns
"If the U.S. were to implement 25% tariffs on all imports from China for 4-6 months and China were to respond with countermeasures, we believe we would see the global economy entering recession in three quarters."
Business groups on Tuesday said President Trump's decision to postpone and exempt some consumer goods scheduled for tariffs did not go far enough, and urged him to take additional steps to wind down the trade war with China.
The White House trade office announced Tuesday morning that the administration would delay tariffs on certain consumer goods, from Sept. 1 to Dec. 15, while also removing items from the list targeting Chinese products.
"We are pleased the administration is delaying some tariffs ahead of the holiday season and acknowledging the impact on American consumers," said David French, head of government relations for the National Retail Federation. "Still, uncertainty for U.S. businesses continues, and tariffs taking effect September 1 will result in higher costs for American families and slow the U.S. economy."
US removes some items from China tariff list, delaying tariffs for others, including cell phones
The products in the group that will have tariffs delayed include "cell phones, laptop computersand certain items of footwear and clothing."
Trump said earlier this month that starting Sept. 1 he would impose a 10 percent tariff on virtually all imports from China that he had not already hit with import taxes. The list of $300 billion-worth of imports included consumer goods for the first time.
Markets tanked from record highs in July over the news, and Wall Street economists began warning that a recession was becoming more likely amid increased trade tensions.
Trump's decision to exempt certain consumer products from the tariffs and delay others until mid-December will let U.S. companies breathe a brief sigh of relief, but business groups said it was only a small step.
The U.S. Chamber of Commerce, the country's largest business lobby, said the news was "welcome," but urged a comprehensive solution to roll back a separate 25 percent tariff on $250 billion of Chinese imports.
Phones, laptops and game consoles get tariff reprieve until December
Electronics manufacturers are no doubt breathing a collective sigh of relief this morning at the news that the United States Trade Representative (USTR) has delayed tariffs on a number of categories. A long list of exports, including livestock, foodstuff and clothing will have the additional 10 percent tariff imposed on September 1. Others, including “cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing” have simply been delayed until December 15. It seems the fees are an inevitability, but many might be able to scrape through just in time for the holidays.
"Now, it's more important than ever that the two sides return to the negotiating table and recommit to achieving progress towards a comprehensive, enforceable agreement," said Neil Bradley, the chamber's chief policy officer.
Other groups said much damage has already been done with the trade war between the world's two largest economies, which began in July 2018.
"Americans are at less risk of economic harm today than they were yesterday, but not as well off as if the tariffs had never been threatened," said Tim Phillips, president of Americans for Prosperity, a Koch-backed group that promotes free trade.
"It's time to give Americans a real Christmas present. End the trade war," he added, referencing the slew of consumer goods such as cellphones, video game consoles and laptops that will exempt from tariffs heading into the holiday shopping season.
Trump said Tuesday that Chinese officials had a phone call with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, and that a follow-up call is expected in two weeks.
US delays tariffs on some Chinese-made electronics until December 15th
The Trump administration announced a tariff earlier this month on an additional $300 billion of Chinese imports that was to take effect from September 1st, but the 10 percent levy will only kick in then for about half of the goods. The tariff on others -- including mobile phones, laptops, monitors, game consoles, some toys and LED lamps -- is set to be enforced from December 15th. The Office of the United States Trade Representative said it was adjusting the schedule for some products following its public comment and hearing process.
Trade talks are slated to resume in September.
Some experts say China may be digging in for a more protracted trade battle, calculating it can outlast Trump's presidency. While the yearlong dispute has taken a bite out of China's economy, the trade war's impacts on the U.S. economy could have repercussions come November 2020.
"Today's announcement doesn't address the vast majority of tariffs that are driving uncertainty, putting farmers out of business and causing small businesses to slow hiring," the group Tariffs Hurt the Heartland said in a statement.
"Instead of picking temporary winners and losers and holding the U.S. economy hostage, it is time to reach an agreement that finally puts an end to the trade war," the group added.
Trump also faced skepticism from Democrats in Tuesday's retreat.
"Postponing tariffs on video game consoles and pet toys is giving Trump the stock market bump he wants, but he's still going ahead with tariffs on books, school supplies and clothes that will hit working Americans the hardest," said Sen. Ron Wyden (Ore.), the top Democrat on the Senate Finance Committee, which oversees trade.
"As I have said many times, I fully support going after China's cheating on trade. But Trump's incoherent posturing is hitting American pocketbooks without changing China's behavior," he added.
At a private dinner, Tim Cook told Trump that his tariffs are hurting Apple and helping Samsung.
Apple investors over the past few weeks have been particularly wary of looming tariff increases on a range of products imported from China. With some devices potentially subject to a tax as high as 25%, it's widely expected that Apple, when push comes to shove, will eat the tax as opposed to passing along the additional cost to consumers. Either way, Apple's bottom line is poised to take a hit. In the meantime, Apple has been lobbying hard to convince the Trump administration that tariffs might lead to a range of unintended consequences.
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