US President Donald Trump’s new tariffs on Chinese goods are a “job killer” that will slam consumers and could make a recession more likely, industry groups said Wednesday.
The latest cry for peace in Trump’s year-long trade war came just days before the first in series of tariff increases is due to go into effect -- potentially raising prices ahead of the crucial holiday shopping period.
In a sharp deterioration in the US-China trade war, Trump last week ramped up the punitive duties for the vast majority of US imports from China.
The five percent increases, which will take the tariffs to 15 percent and 30 percent, are due to roll out in stages through December and target some popular items, such as laptops, mobile phones and some shoes.
More than 200 footwear manufacturers and retailers, including major brands such as Nike and Foot Locker, signed onto the letter alerting that the new tariffs could cost US consumers an additional $4 billion a year and increase the chances of an economic downturn.
A broad array of 160 other trade groups -- including software and electronics manufacturers, as well as retailers, liquor producers and others -- also warned Trump of higher prices and damaged consumer confidence and urged him to abandon the tariff strategy.
“We’ve been telling the White House since the beginning that tariffs will be paid by Americans in the form of higher prices, and that due to our already high import taxes, this will be a job killer,” Matt Priest, president of the Footwear Distributors and Retailers of America, said in a statement.
The footwear group directly disputed Trump’s claim that China is bearing the cost of the tariffs.
“There is no doubt that tariffs act as hidden taxes paid by American individuals and families,” its letter said.
Long a powerful voice in Washington, US industrial lobbies have been unable to persuade Trump to avoid escalating his year-old trade war with China.
The Information Technology Industry Council agreed China needs to change its unfair trade practices, but said in a statement Wednesday that “the current tool of tariffs has simply not worked, and we’re continuing to see the negative results.” - Recession risk - The companies agreed with economists that recession risks are rising, warning Wednesday that uncertainty caused by the confrontation with Beijing was rattling the wider economy -- a sensitive subject as Trump seeks reelection next year.
“An economic downturn will take away disposable income from US consumers, even as they have to pay more for products,” they said.
Already high US import duties on footwear have continued to rise in recent years even as shoe prices have eased, according to the letter, meaning new tariffs almost certainly will be passed onto consumers.
US officials have delayed or canceled tariffs on some popular items until December, including some shoes, preventing price hikes from hitting just before the holiday shopping period.
But, even before they take effect, the tariffs threaten to drive up prices by straining manufacturers outside China to meet a sudden rush of demand, the letter said.
Trump has blown by turns hot and cold this month, thundering last week that US companies should withdraw from China but optimistically predicting a deal on Monday.
Trump’s recent, more moderate tone helped stanch bleeding on Wall Street but was quickly met with skepticism by investors since Beijing did not seem to share that optimism.