Washington’s most powerful business group is urging the Trump administration to end its trade war with China, saying that its tariffs risk costing the US economy $1tn over the next decade.
In a strongly worded submission to the Office of the US Trade Representative, the US Chamber of Commerce calls for a reversal of tariffs imposed over the past two years and says proposed tariffs on a further $300bn of Chinese imports would “dramatically expand the harm already done” to US consumers, workers and companies.
President Donald Trump’s trade strategy has forced many companies to raise prices and reroute their supply chains, fraying relations with a business community that had welcomed his agenda of corporate tax cuts and deregulation. Last week 600 companies, including the retailers Walmart, Target and J Crew, put their names to a letter warning that the proposed tariffs could lead to 2m job losses and cost the average American family $2,000.
A survey released last week by the Business Roundtable found that the escalating trade war had sent CEOs’ confidence in the outlook for the US economy down for a fifth straight quarter. Jamie Dimon, chairman of the blue-chip lobby group and chairman and chief executive of JPMorgan Chase, told reporters that Mr Trump’s threatened next wave of 25 per cent tariffs would add to the risk of an economic downturn.
James Gorman, chairman and chief executive of Morgan Stanley, separately warned an investor conference last week that a full-blown trade war would be “a disaster” that could tip the US into a recession.
The submission from the US Chamber says it shares the administration’s concerns about Chinese intellectual property rights violations, forced technology transfers and state interventions but describes its policy of imposing unilateral tariffs as counterproductive.
“Tariffs are hidden, regressive taxes that are being paid by US businesses and consumers,” it says, referring back to the Smoot-Hawley Tariff Act of 1930 to warn that “unilateral tariff strategies have no record of historical success and have always led to unintended consequences”.
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Instead, the US Chamber urged the Trump administration to reopen negotiations with Beijing and work with allies “with the aim of striking a high-standard, comprehensive, enforceable agreement that puts an end to tariffs already in place and forestalls further disruptions to the livelihood of all Americans”.
Mr Trump has said he expected to meet his Chinese counterpart, Xi Jinping, at this month’s G20 summit despite “testy” relations between the powers.
The US Trade Representative’s office will begin seven days of hearings on the latest proposed tariffs on Monday. Those due to testify range from specialist groups such as the American Sportfishing Association and the Evangelical Christian Publishers Association to multibillion-dollar companies including Best Buy, Hasbro and HP.
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