Trump tariff tweets thicken fog of trade war for farmers and retailers – Washington Examiner
The trade war that President Trump is waging with China was burden enough for the Midwest farmers who helped put him in the White House, forcing some to have awkward conversations with lenders and others all the way into bankruptcy.
Getting updates on that conflict through posts on the president’s personal Twitter account, which can disrupt contract talks in a matter of seconds by causing abrupt drops in prices, has made managing their livelihoods even more confusing.
“All it takes is a tweet to knock markets from 2-3 cents up to 16 cents down,” Scott VanderWal, vice president of the American Farm Bureau and a third-generation soybean grower, told farmers at Minnesota’s annual FarmFest this week. “Things like that cost us a lot of money.”
Farmers aren’t the only ones increasingly worried about losing money from White House trade wars, which have focused heavily on China but also encompass levies on washing machines, solar panels, steel and aluminum and threatened assessments on Vietnamese and Indian imports as well as automobiles and French wines.
Retailers and manufacturers warned this week the 10% tariffs the president promised in an Aug. 1 Twitter post on $300 billion in Chinese goods would force them to choose between raising prices and laying off workers. The duties encompass all merchandise from the country not covered under previous tariffs of 25%.
China’s government allowed its yuan to depreciate afterward, prompting the Treasury Department to declare the country a currency manipulator and cut off all purchases of U.S. crops.
“Those tweets have almost the impact of law,” said Rob Larew, vice president of public policy for the National Farmers Union. A former congressman, he grew up on a dairy farm in West Virginia and has long experience with growers being targeted in trade disputes.
“It’s the most politically soft spot in the country to hit,” he said.
Manufacturers are finding themselves increasingly vulnerable, too, particularly small ones. While production companies of all sizes spend years building cost-effective supply chains, large ones can typically absorb higher supply costs and sometimes shift operations between factories in different countries if necessary.
American Textile Co., the 93-year-old family business that CEO Lance Ruttenberg’s grandfather started with his four brothers in 1925, doesn’t have those luxuries.
“A supply relationship is years in the making,” he said, built on considerations from quality to capability and price, and impossible to alter “in 15-minute increments that arrive by tweet.”
Ultimately, “the administration’s claim that such partnerships can change quickly is not true,” Ruttenberg said.
“These tariffs don’t appear to be part of any broader policy or strategy, which makes them even more damaging, since we see no benefit to their use,” he said. “American jobs will be lost.”
So far, U.S. taxpayers have shelled out $27 billion to cover Trump’s tariffs, with the majority of the cost coming from the Chinese duties, according to Tariffs Hurt the Heartland, an alliance of businesses opposing the levies. The bill in June alone reached $6 billion, according to the group’s analysis of Census Bureau data.
The president, however, has brushed off such concerns, maintaining that his tariffs will eventually produce a beneficial trade agreement with China, opening its markets further to U.S. businesses and curbing Beijing’s appropriation of American firms’ intellectual property as a condition of doing business there.
“We have all the cards,” Trump told reporters on Friday, hinting that talks with Chinese negotiators next month might be canceled. “China wants to settle this deal. They’ve had the worst year that they’ve had in many, many decades, and it’s getting only worse. Thousands of companies are leaving China. They would like to make a deal. I’m not ready to make a deal.”
Business owners, however, are. And they’re increasingly frustrated by the president’s assertion that a less valuable Chinese currency makes up for the tariffs they must pay when their goods arrive in port.
Many U.S. companies have supply contracts built on the dollar, rather than the Chinese yuan, so the devaluation carries no immediate impact, they say. And the yuan, in any case, has fallen only 8.3% since early 2018, which wouldn’t cover even the 10% tariffs, much less the 25% duties.
Delta Children, a family-owned maker of cribs, bassinets, and childhood beds based in New York, has already been hit by the 25% tariffs, said president Joseph Shamie. The parents who buy his products are now paying higher prices even though their incomes didn’t have a comparable increase, and some can’t afford it, he said.
“I understand his issues, which are America’s issues, with China,” Shamie said, referring to Trump, “but this is not the way to do it. We’ve put a tax on having a child, we’ve put a tax on the average consumer, and it’s just a very sad story.”
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