Cisco, HP, others make last-ditch effort to avoid US-China trade war4 min read . Updated: 07 Sep 2018, 06:35 PM IST
The latest installment of tariffs would bring to $250 billion the total value of Chinese goods hit with duties, covering nearly half of all imports into the US last year
Washington/Columbus: Cisco Systems Inc. and Hewlett-Packard Enterprise Co. as well as other 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 $200 billion 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. As of Friday morning in Washington, the White House had made no announcement. S&P 500 Index futures fell along with European shares as investors awaited the next move.
Trump, in an interview with Bloomberg News last week, showed no sign of backing down, repeating his long-standing 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," the president said.
“We think there’s a high likelihood it happens sometime soon," said Josh Kallmer, executive vice-president for policy at the Information Technology Industry Council, referring to levies on $200 billion in goods. “It’s becoming a lot more difficult for the administration to do what it said it’s trying do, which is minimising harm to consumers."
The US Trade Representative’s office didn’t respond to a request for comment.
On Thursday, Cisco, 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, can’t quickly adjust and the tariffs imposed so far haven’t led to any meaningful concessions, a coalition of the National Retail Federation and 150 organizations said in separate comments to Lighthizer. The administration should cease further tariffs actions and give another shot at talks for a trade deal with 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 installment of tariffs would bring to $250 billion the total value of Chinese goods hit with duties, covering nearly half of all imports into the US last year. Beijing has threatened to retaliate with duties on $60 billion in American products.
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 spokesman, at a regular briefing on Thursday in Beijing.
The trade conflict between the world’s two biggest economies shows little sign of abating, roughly 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 has warned that a trade war could undermine the strongest global upswing in years.
At public hearings last month, 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 lawmakers, 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 hopes of a compromise. The two nations have maintained contact on a working level since Vice Commerce Minister Wang Shouwen visited the US last month, 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 with Mexico, and he heads to Brussels on Monday to meet with EU officials to discuss the outlines of a trade deal announced in late July.
The Trump administration may roll out the tariffs on the $200 billion in phases. It waited about three weeks after announcing in mid-June that it was imposing tariffs on $34 billion of Chinese goods before they were implemented. The next stage of tariffs on $16 billion 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 Ltd., which manages $988 billion 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."