Cisco, HP and other tech companies make last-ditch effort to avert new tariffs
Washington — Some of America’s most prominent technology companies and retailers made a last-minute push to convince President Donald Trump to reverse course on a plan to impose tariffs on $200bn in Chinese imports.
Members of the public had until Thursday to comment on the administration’s plan to slap tariffs on everything from bicycles and baseball gloves to digital cameras, paving the way for Trump to announce the tariffs as early as Friday.
By midnight US time, or midday on Friday in Beijing, the White House had made no announcement on its intentions.
Trump showed no sign of backing down in an interview with Bloomberg News last week, repeating his longstanding complaint that China has taken advantage of the US and its leaders for decades.
“It’s time to stop. We can’t let this happen,” he said.
Josh Kallmer, executive vice-president for policy at the Information Technology Industry Council, said: “We think there’s a high likelihood it happens sometime soon.… It’s becoming a lot more difficult for the administration to do what it said it’s trying to do, which is minimising harm to consumers.”
Tit-for-tat tariffs are counterproductive and so far have only produced increased costs for American businesses, farmers, importers, exporters and consumersNational Retail Federation
Cisco Systems, Hewlett-Packard and other technology companies sent a letter to US trade representative Robert Lighthizer urging the administration to avoid imposing more tariffs.
By increasing duties on telecommunications networking gear, the administration would raise the cost of accessing the internet and slow the roll-out of next-generation wireless technologies, the companies said.
Manufacturers and small and mid-sized firms, in particular, cannot quickly adjust and the tariffs imposed so far have not led to any meaningful concessions, a coalition of the National Retail Federation and 150 organisations said in separate comments to Lighthizer.
The administration should cease further tariffs actions and give another shot at talks for a trade deal with China, it said.
“Tit-for-tat tariffs are counterproductive and so far have only produced increased costs for American businesses, farmers, importers, exporters and consumers,” the coalition said.
The latest instalment of tariffs would bring to $250bn the total value of Chinese goods hit with duties, covering nearly half of all imports into the US in 2017. Beijing has threatened to retaliate with duties on $60bn in American products.
It’s becoming a lot more difficult for the administration to do what it said it’s trying to do, which is minimising harm to consumersJosh Kallmer, the Information Technology Industry Council
China will be forced to retaliate if the US ignores resistance in public hearings and imposes additional tariffs, said Gao Feng, a ministry of commerce spokesperson, at a regular briefing on Thursday in Beijing.
The trade conflict between the world’s two biggest economies shows little sign of abating, about two months after the US imposed its first round of tariffs on Chinese goods, and negotiations to defuse the tensions have stalled. The International Monetary Fund (IMF) has warned that a trade war could undermine the strongest global upswing in years.
At public hearings in August, companies warned that fresh duties on Chinese imports could hike costs and stifle innovation. Almost 350 individuals from companies, trade associations and other entities testified, with most opposed to the levies. Many legislators, including from Trump’s own Republican party, oppose the president’s zeal for tariffs but have limited options for curbing such sanctions.
Efforts to negotiate a US-China truce have proved fruitless. Two days of talks in Washington in August failed to yield a breakthrough following three rounds of unsuccessful talks earlier in the year, dimming the hope of a compromise.
The two nations have maintained contact on a working level since commerce vice-minister Wang Shouwen visited the US in August, Gao said on Thursday.
US trade officials are juggling a number of high-profile files, in addition to the China tariffs. Lighthizer has been trying since last week to reach a deal with Canada on a revised North American Free Trade Agreement (Nafta) with Mexico, and he heads to Brussels on Monday to meet EU officials to discuss the outlines of a trade deal announced in late July.
It may take longer to figure out what the repercussions are, but the US will not be unscathedKristina Hooper, chief global market strategist at Invesco
Talks between the US and Canada have seemed upbeat, but are not expected to lead to a deal this week, a Canadian government official said, speaking on condition of anonymity.
The pace of meetings between Lighthizer and Canadian foreign minister Chrystia Freeland has slowed since last week, as both countries look to be squaring off. The Trump administration gave notice on August 31 of intent to sign a deal that could include Canada. Freeland has said there is progress, but that no deal is done until it is done. The officials will not be able to work through the weekend into the new week because of Lighthizer meeting in Brussels.
The Trump administration may roll out the tariffs on the $200bn in phases. It waited about three weeks after announcing in mid-June that it was imposing tariffs on $34bn of Chinese goods before they were implemented. The next stage of tariffs on $16bn of goods took effect in August.
The tariffs are intended to punish China for what the Trump administration says are unfair trading practices, including the forced transfer of intellectual property from US companies trying to get a foothold in the Chinese market.
Investors in US assets have generally shrugged off the escalating trade war with China, said Kristina Hooper, chief global market strategist at Invesco, which manages $988bn in assets. At some point, the duties will start to hurt American companies, she said.
“If we continue on our current trajectory, I do believe we’ll experience some kind of reckoning,” Hooper said. “It may take longer to figure out what the repercussions are, but the US will not be unscathed.”