WASHINGTON - A list of companies that includes retailers, manufacturers, tech companies, and wood industry associations has urged President Trump to quickly negotiate a deal with China to end the tariffs. They warned that tariffs will greatly damage the U.S. economy.
“We know firsthand that the additional tariffs will have a significant, negative, and long-term impact on American businesses, farmers, families, and the US economy,” the companies said in the letter. “An escalated trade war is not in the country’s best interest, and both sides will lose.”
In the letter, the companies cited a study which found that 25 percent tariffs would eliminate more than 2 million U.S. jobs and add more than $2,000 in costs for the average American family of four.
The new tariffs, which increased from 10 percent to 25 percent early May, will affect more than $200 billion worth of Chinese exports. Companies on the list included major retailers like Walmart, Costco, and Target, as well as wood associations including The American Home Furnishings Alliance, The Home Furnishings Association, the Hardwood Fenderation, and the International Wood Products Association. Other notable signees include Ikea North America, Macy's, the American Society of Interior Designers, and the American Lighting Association.
Here's the letter:
Dear Mr. President,
On behalf of the undersigned companies below and the millions of workers we employ, we are writing regarding the ongoing trade dispute between the U.S. and China. We agree that our trading partners must abide by global trade rules, and we support the administration’s efforts to address unfair trading practices, including intellectual property violations, forced technology transfer and more. We encourage the administration to negotiate a strong deal with China that addresses longstanding structural issues, improves U.S. global competitiveness and eliminates tariffs. We believe this goal can be achieved without taxing Americans.
We remain concerned about the escalation of tit-for-tat tariffs. We know firsthand that the additional tariffs will have a significant, negative and long-term impact on American businesses, farmers, families and the U.S. economy. Broadly applied tariffs are not an effective tool to change China’s unfair trade practices. Tariffs are taxes paid directly by U.S. companies, including those listed below – not China. According to Trade Partnership Worldwide LLC, 25 percent tariffs on an additional $300 billion in imports (combined with the impact of already implemented tariffs and retaliation) would result in the loss of more than 2 million U.S. jobs, add more than $2,000 in costs for the average American family of four and reduce the value of U.S. GDP by 1.0 percent. Furthermore, we have seen repeatedly that tariff increases and uncertainty around these trade negotiations have created turmoil in the markets, threatening our historic economic growth.
Mr. President, we support your efforts to hold our trading partners accountable, level the playing field for American businesses and forge enforceable trade agreements. We urge your administration to get back to the negotiating table while working with our allies to develop global, enforceable solutions. An escalated trade war is not in the country’s best interest, and both sides will lose. We are counting on you to force a positive resolution that removes the current tariffs, fosters American competitiveness, grows our economy and protects our workers and customers.
Check out the full document, which includes all 661 signatures.
We surveyed more than 200 of our readers to find out how they are being affected by the tariffs. A total of 85 percent of survey respondents expect to raise prices in response.
Specific responses ranged greatly. Some expect great losses of revenue, some are okay with rising costs of material, some expect no difference in their business, and some are more nuanced:
- The current 10% tariff added to our previous 3.3% has resulted in an 11% drop in sales during our usual best months. If the threatened 25% comes into play we will virtually have to consider shutting down and laying off all our employees.
- Not much, our imports are a very small portion of things we buy. We are hoping the tariffs are extended to impact products that unfairly compete against us.
- Your clients will only pay so much for product. Domestic sources are still too expensive. There is a slow down of opportunities.
We've also heard from several companies outside of the survey. Cabinet Joint, Sunco Cabinets, CNC Cabinetry, JSI, and others have sent letters to their customers indicating prices would increase or that they could. Trendway Corp., a Michigan employee-owned office furniture manufacturer, has announced its commitment to no price increases in the next 12 months.
Williams-Sonoma anticipated the tariffs, moving production away from China and hiring 500 U.S. workers.
At a recent Wood Products Manufacturers Association (WPMA) meeting in Nashville, wood product executives named tariffs as one of the main challenges they are facing, along with trucking problems and a labor shortage.
The Reshoring Initiative (RI), whose mission is to teach manufacturers that local production can reduce costs of ownership, is telling multinational companies hit by the tariffs to do the math correctly.
Most companies make sourcing decisions based solely on price, oftentimes resulting in a 20 to 30 percent miscalculation of actual offshoring costs. The firm offers a free online tool, the Total Cost of Ownership (TCO) Estimator, designed to help companies account for all relevant factors — overhead, balance sheet, risks, corporate strategy, and other external and internal business considerations — to determine the true total cost of ownership. TCO allows companies to better evaluate sourcing, identify alternatives and even make a case when selling against offshore competitors.
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