NEW YORK, Aug 8 — The cost of President Donald Trump’s latest tariffs on Chinese goods will either be passed on to consumers, or taken from profits, several US companies said yesterday.
“The American people are being misled by this administration that China is paying for these tariffs. This is a tax on them, or on the businesses that are bringing products to America,” said Win Cramer, chief executive of Jlab Audio, a California company that makes headphones.
Cramer, who has suspended plans to hire more staff in light of the tariff threat, joined a conference call organised by “Tariffs Hurt the Heartland,” a campaign of trade organisations to a policy of a president who has referred to himself as “tariff man.”
The group released data showing US consumers paid US$6 billion (RM25 billion) in tariffs in June, up 74 per cent from the year-ago period.
The conference call was organised in response to Trump’s announcement last week of plans to enact a 10 per cent tariff on US$300 billion in Chinese goods on September 1, a move that would affect a broad swathe of consumer goods spared in earlier tariff rounds.
Separately, Consumer Technology Association warned Trump’s latest tariffs could lift payments on electronics and other items by US$1 billion or more.
Participants said it is difficult in many cases to find suitable alternative suppliers to China because they may lack infrastructure or knowhow on meeting US safety standards, such as for lead-free toys and other items.
Also, emerging manufacturing centres such as India and Vietnam may be reluctant to invest heavily in costly new infrastructure in case of a sudden US policy reversal under a sudden deal with China.
Hiking prices would dent sales, while a decision to eat the costs would harm the business, companies said.
“We’ll have to face very tough decisions, including job losses and store closures,” said Wade Miquelon, chief executive of Joann Stores, an Ohio-based chain of craft stores.
Jay Foreman, chief executive Basic Fun! Toys, a Florida toymaker and distributor that imports from China, said some of his retail partners plan to hike prices this Christmas by 10 to 20 per cent, while others will hold off in the 2019 season but lift prices next year.
The coalition plans additional local events and lobbying efforts to encourage Congress to scrutinise the Trump administration’s trade policies, said David French, senior vice president of government relations at the National Retail Federation.
“The tariffs so far have been on the margins of the economy,” French said. “So what’s happened to date is not an indicator of what to expect.” — AFP