Sunday , May 27 2018

US business groups bash Trump tariffs as China talks intensify

Bloomberg

US companies and business groups are lining up to oppose the Trump administration’s plan to slap tariffs on Chinese imports, as the two nations step up efforts to resolve their trade dispute.
About 120 firms and industry groups are scheduled to testify at a hearing on the administration’s plan to impose tariffs on $50 billion in Chinese goods. So many groups signed up that the US Trade Representative’s Office extended the hearing until Thursday. The USTR has received more than 2,700 comments.
The hearing will coincide with a planned trip by Chinese President Xi Jinping’s top economic adviser to Washington for broader trade negotiations, in follow-up to talks led by US Treasury Secretary Steven Mnuchin in Beijing earlier this month.
Companies including US Steel Corp., Best Buy Co., and General Electric Co., as well as lobby groups such as the National Retail Federation, Consumer Technology Association and National Association of Manufacturers, are set to testify this week. While they’re generally supportive of US action to level the playing field on trade and investment with China, many want the talks to focus on resolving differences rather than the pursuit of tariffs.
Some companies, such as AK Steel Corp., are in favour President Donald Trump’s plans to slap duties on Chinese goods to punish the Asian nation for abuse of US intellectual property. US manufacturers, consumer products companies and technology groups that filed written submissions opposing the tariffs say they would raise input costs and consumer prices and draw crippling retaliatory duties from China.

HIDDEN COSTS
“Tariffs are hidden, regressive taxes that will be paid by US businesses and consumers, paradoxically harming US competitiveness,” the US Chamber of Commerce said in written testimony filed before the hearing.
The industry backlash against the planned tariffs comes amid signs the president may be seeking a less confrontational approach to Beijing. In a surprise twist, Trump said he was helping to allow Chinese telecom-equipment maker ZTE Corp. “get back into business” after the US cut off the company’s access to US suppliers for allegedly making false statements in a sanctions case.
Trump defended his move to help ZTE after the concession stoked bipartisan criticism. “ZTE, the large Chinese phone company, buys a big percentage of individual parts from US companies,” Trump said in a tweet. “This is also reflective of the larger trade deal we are negotiating with China and my personal relationship with President Xi.”

WASHINGTON NEGOTIATIONS
The moves may bode well for ongoing trade talks between the world’s two biggest economies. Vice Premier Liu He, Xi’s top economic aide, is expected to visit Washington from May 15-19 for high-level trade negotiations.
Tension between the US and China has roiled financial markets and raised fears the world’s two biggest economies may stumble into a trade war. The International Monetary Fund has warned that a global trade war could undermine one of the broadest world upswings in years.
Trump proposed the tariffs after USTR concluded China violates US intellectual property in a variety of ways, including by forcing American companies to transfer technology. Last month, the administration released a list of $50 billion of proposed products to be hit with tariffs, from semiconductor components to sewing-machine needles. After China promised to retaliate with tariffs in kind on soybeans and other US exports, Trump suggested the amount should be raised by $100 billion. The US hasn’t released a list to meet that expanded goal, and the administration hasn’t specified when any of the duties will take effect, opening the door to companies to try to shape Trump’s plans. A comment period on the first $50 billion in proposed duties ends May 22.
The tariff issue has laid bare a dilemma for US companies, many of which are disappointed with the progress China has made on economic reforms but don’t want to be drawn into a diplomatic dispute that would hurt their interests.

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