Businesses Ask That Latest Plan For U.S. Tariffs On China Be Scrapped

Jun 17, 2019
Originally published on June 17, 2019 3:12 pm
Copyright 2019 NPR. To see more, visit https://www.npr.org.

ARI SHAPIRO, HOST:

These hearings at the U.S. Trade Representative go on for several days. And the witness list reveals just how intertwined the U.S. and Chinese economies are. For more on that, we are joined by NPR's Jim Zarroli. He's been covering the trade dispute between China and the U.S. And Jim, we just heard about how clothing and footwear companies could be hurt by these proposed tariffs. How many other companies are saying the same thing?

JIM ZARROLI, BYLINE: A lot of them are saying that. Over the next week or so, the government is going to be hearing from hundreds of them - businesses and trade groups, companies that make all kinds of things - you know, medical devices, baby carriers, cashmere sweaters. A lot of these are companies you've heard of, like New Balance, Kenneth Cole, Gorton's Seafood. And some of them are - maybe you haven't heard of them, but they sell products you may have in your home, like Loftex, which makes towels and throws. And their products are found on, you know, shelves at Walmart and Costco and Kohl's.

Now, a few of these companies that are going to be testifying say tariffs are a great idea, like Revere Copper products says it's been hurt by what it's called - what it calls China's long history of cheating on trade. But the vast majority of these companies testifying say the tariffs are going to hurt them.

SHAPIRO: Give us an example of what people from these companies are telling you.

ZARROLI: I spoke with Patricia Nash, who heads a company that makes pocketbooks and other kinds of leather goods. It's based in Tennessee, but she makes her products in China. She says if she did it here, the items she sells would cost two or three times as much. There simply isn't a labor force that can make leather goods as cheaply and efficiently as the Chinese. Last year, she was hit with the first round of tariffs. She had to raise her prices, and she thinks demand for the leather goods that she sells has softened as a result.

PATRICIA NASH: And that's the kind of thinking we're starting to see with a lot of different people. It's just that - you know, it was just that straw that broke the camel's back. It's starting to impact the business.

ZARROLI: Now, Nash is actually not testifying at the hearings this week. Somebody else from her company is going to do so. She's actually in China because the manufacturer she deals with there are thinking of moving production to other countries as a way of kind of getting around the tariffs. Countries like Cambodia, Vietnam - they can export to the United States and pay little or no tariffs.

SHAPIRO: So do you see a lot of companies talking about moving their production headquarters away from China?

ZARROLI: Yeah. You're already seeing that being talked about a lot. Foxconn, which makes iPhones in China, has already said it's ready to move some of its production to other countries. But you know, it isn't easy to do. You know, look at the company Wolverine, which is based in Michigan. It makes heavy-duty work boots. And Wolverine was one of the companies that wrote to the government to complain about the tariffs. And it says it's not easy to move production out of China. It takes years of planning to establish new factories.

SHAPIRO: And what about moving to the United States? Is that reasonable for these companies?

ZARROLI: You know, a lot of companies always say they'd like to do that but they can't - it's too expensive; there isn't the labor force they need right now, not the manufacturing infrastructure. So it doesn't seem to be happening to any great extent so far. But you know, that's the kind of change that wouldn't be happening overnight anyway.

SHAPIRO: That's NPR's Jim Zarroli. Thank you, Jim.

ZARROLI: You're welcome. Transcript provided by NPR, Copyright NPR.