Economy

Retailers Ask Trump Not to Tank The Economy

JM Ashby
Written by JM Ashby

Nearly 100 retailers and apparel companies have addressed letters to the White House asking Trump not to shit on the economy by imposing tariffs on imports from China for no substantive reason.

Retailers that are already facing pressure from the so-called Retail Apocalypse informed Trump that his actions will 'punish working families.'

Several large U.S. retail companies, including Wal-Mart Inc, Target Corp, Best Buy Co Inc and Macy’s Inc, on Monday sent President Donald Trump a letter urging him not to impose massive tariffs on goods imported from China.

In a separate letter to Trump on Monday, 82 shoe companies, including Nike Inc, Genesco, Payless ShoeSource Inc, Under Armour, Shoe Carnival Inc and Weyco Group echoed those concerns. [...]

“Applying any additional broad-based tariff ... would punish American working families with higher prices on household basics like clothing, shoes, electronics, and home goods,” the retailers said.

The footwear companies argued that shoes already are subject to hefty tariffs.

“Adding even more tariffs on top of this heavy burden would mean higher costs for footwear consumers and fewer U.S. jobs,” the letter stated. “Given the price sensitivity of our products, any additional increases in our costs would strike right at the heart of our ability to keep product competitively priced for our consumers.”

It is true that retailers are acting in their own self interest here, but they're also not wrong. Trump's tariff will raise the price of consumer products and will likely lead to significant job losses for Americans even before considering the nearly-guaranteed possibility that China will retaliate. We have a service-based economy that heavily depends on employment in retail industries and Trump's actions will threaten the largest source of private sector employment in the country.

Trump wants to use Section 301 of the Trade Act of 1974 to punish China for intellectual property theft, which is a real problem (not as much today as it used to be), but if Trump's tariffs are broad rather than targeted, it will undermine the entire spirit of the law and our trade agreements.

The dire warnings of retailers and the advice of people who actually know how things work is evidently falling on deaf ears as Reuters reports that Trump will announce his tariffs on imports from China by the end of this week.

WASHINGTON (Reuters) - The Trump administration is expected to unveil up to $60 billion in new tariffs on Chinese imports by Friday, targeting technology, telecommunications and intellectual property, two officials briefed on the matter said Monday. [...]

A source who had direct knowledge of the administration’s thinking told Reuters last week that the tariffs, authorized under the 1974 U.S. Trade Act, would be chiefly targeted at information technology, consumer electronics and telecoms and other products benefiting from U.S. intellectual property. But they could be much broader and hit consumer products such as clothing and footwear, with a list eventually running to 100 products, this person said.

Reuters also reports that sources say the tariffs may be subject to a public comment period before they're implemented, but that's such an idiotic idea it's difficult to even say it with a straight face.

Even if the public is allowed to comment before the tariffs are implemented, the announcement alone will probably hit the market where it hurts and prompt action by the Chinese government.

Furthermore, even in the unlikely scenario that Trump backs down because the public's reaction is overwhelmingly negative, the uncertainty and turmoil itself will likely shave economic growth by a measurable amount and for no good reason.

  • Those idiots. Don’t they realize Trump can’t read?

    • Tony Lavely

      “Don’t they realize Trump *won’t* read?”
      FIFY.

  • Part of me is laughing at corporations because they backed Trump and they were sooooo sure he would be good for business. The other part of me is really scared of a serious economic downturn. So I basically feel like I’m laughing at a funeral. Good times.

  • muselet

    Okay, Donald Trump wants to impose tariffs on products from China because … why, exactly?

    If this is about seeing China as a military rival, then tariffs will be ineffective. If this is about seeing China as an economic rival, that ship sailed a long time ago and tariffs will mostly affect US consumers. China will still be able to sell its products to other countries, and the US economy will suffer.

    If this is about Trump wanting a distraction from all his legal problems, it will be effective with The Base and Fox News Channel, but only temporarily.

    It’s entirely possible the tariffs will cause a global economic “correction” (as economists call a downturn when they’re trying not to panic the rubes), and the WTO will likely slap the US down in any case.

    Maybe it’s just me, but I’m fairly certain this is not the way a stable genius behaves.

    –alopecia

    • Draxiar

      He does it because he thinks it makes him look like a tough lion in making deals*. I don’t think it goes any further than that. Never you mind that when it comes to Russia he looks like a kitten.

      *There are words and phrases that I’ve come to cringe at hearing or using (or won’t use) because of this creature: deal, tremendous, that I can tell you, believe me, collusion, fake news, witch hunt…

    • JMAshby

      He’s going to say it’s about intellectual property theft but his actions will do virtually nothing to stop it.

    • 1933john

      Could it also be that they are Chinese?