A number of Senior US officials, headed by Treasury Secretary Steven Mnuchin, have been working to end the trade war peacefully through diplomacy rather than standoffs. Despite those efforts, the trade war escalated this past week as President Trump ordered more than $200 billion in tariffs on Chinese goods. The new round of tariffs will be a 10% tax that focuses on consumer goods. In response to the tariffs, Beijing retaliated with tariffs of their own on more than $60 billion worth of American products.
It appears neither side can agree on the best approach to take the issue on. Trump has sided with the hardliners, who are taking a tough approach. They believe that the trade battle is a “winnable” war. Many Republicans have advocated for the hardline approach. However, on the other side of the spectrum, there are many companies and US officials who feel the best approach is diplomacy.
Among those companies is Alibaba. According to Jack Ma, the billionaire CEO of Alibaba, the further escalating trade war could make it difficult for him to deliver on the promise to bring more than 1 million jobs to the United States. In a statement, Ma said, “This promise was on the basis of friendly China-US cooperation and reasonable bilateral trade relations, but the current situation has already destroyed that basis. This promise can’t be completed.” Beyond Alibaba, Target, Apple, and Walmart have warned Trump and the administration that new tariffs could cause price hikes.
In a letter to the Trump administration, the companies discussed what products will be affected by that tariff. On that list are grocery items (fish, vegetables, nuts, grains, and flours); personal care products (makeup and shampoo; electronic devices (hand tools, monitors, home air conditioners, refrigerators, and vacuum cleaners), and many other products (furniture, lights, and many paper products).
In the letter, Sarah F Thorn, the senior director for global government affairs at Walmart, said, “This round of tariffs could impact a significant number of common consumer items that are not easily replaceable. The immediate impact will be to raise prices on consumers and tax American business and manufacturers.” The company went on to say that, “As the largest retailer in the United States and a major buyer of U.S. manufactured goods, we are very concerned about the impacts these tariffs would have on our business, our customers, our suppliers, and the U.S. economy as a whole.”
Target provided more commentary on the issue, saying they are deeply troubled by the announced escalation. Target’s chief merchandising officer, Mark Tritton, commented on the matter in his company’s letter, saying, “We are disappointed that despite broadly expressed concerns from companies and groups across a variety of industries, the administration has continued to escalate the threat of tariffs that would penalize American families.”
Beyond Walmart, Target, Apple, and Alibaba, more than 300 retailers signed the letter opposing the tariffs. Among those are larger retails IKEA North American Services, Kohl’s, L.L. Bean, the Gap, Macy’s and Under Armour.
The group letter ended on a strong note, highlighting the following: “Millions of U.S. jobs in our industry’s global value chains — including those in research and design, supply chain, manufacturing, compliance, logistics, and retail — would be put at risk if a new 10 percent or 25 percent tax were imposed, due to fewer sales, less investment, and cost increases throughout U.S. supply chains.”