The United States has once again raised tariffs on China, causing great suffering to many manufacturers

Earlier this month, the US government announced that it would impose a 5% tariff on $300 billion worth of Chinese goods. As the day of the tariff increase draws closer, American companies can’t sit still...

US companies warn of price increases

Earlier this month, the U.S. government announced that it would impose a 5% tariff on $300 billion worth of Chinese goods.

According to Reuters, the Office of the United States Trade Representative (USTR) officially confirmed on the 28th local time that tariffs on $300 billion worth of Chinese goods exported to the United States will be increased from 10% to 15% in batches starting from September 1.

The USTR said that it will impose a 15% tariff on some Chinese goods exported to the United States from September 1, and a 15% tariff on the rest, including mobile phones and laptops, from December 15.

As these additional tariffs on China are about to be officially implemented, many American retailers, footwear, toy merchants and technology companies have issued price increase warnings.

The first batch of goods subject to a 15% tariff include smart watches, Bluetooth headphones, flat-screen TVs and a variety of footwear.

List 4A – Effective September 1, 2019 

The USTR said in the Federal Register that it would begin imposing 15% tariffs on the rest of the $300 billion list of goods, including cell phones, laptop computers, toys and clothing, on Dec. 15.

December 15th List: List 4B – Effective December 15, 2019

In retaliation, after the Chinese government announced tariffs on $75 billion worth of US goods, including crude oil, US President Trump once again intensified the US-China trade war by raising tariffs.

US companies call for delaying tariff plans

Regarding the upcoming 15% tariff increase, more than 200 U.S. footwear companies said on Wednesday that the original average tax rate for shoes was 11%, and now an additional 15% tariff will be imposed. The tariff on some shoes will be as high as 67%. It is estimated that U.S. consumers will have to pay about $4 billion in additional costs each year.

"The imposition of additional tariffs in September on most footwear products from China, including nearly every category of leather footwear, will leave hardworking American individuals and families vulnerable to the harm these tariffs will cause," the companies wrote in a letter to Trump.

"His (Trump's) tariffs on China are raising consumer prices and may even cause more unemployment." Hundreds of retailers, footwear companies and business groups generally believe that Trump's new tariffs on China are impacting American consumers.

The report said that more than 160 other business groups, including the National Retail Federation, the Retail Industry Leaders Association and the Association of Equipment Manufacturers, are also calling on Trump to delay the tariff plan.

Cook is desperate

Apple has always been one of Trump's favorite American companies. In fact, when Trump announced a 10% tariff on $300 billion worth of Chinese goods, Apple CEO Cook had been "looking for a solution."

Because the goods on which Trump imposed tariffs on China include most of Apple's product lines, this means that whether in the Chinese or American markets, the increased tariffs will inevitably lead to rising commodity prices, and rising prices will naturally affect sales.

Therefore, Trump's new tariff measures are not good news for Cook. Cook has approached Trump many times to express his dissatisfaction with the new tariff policy. The most recent time, Cook even used Samsung as an example to tell Trump that the tariff policy is not good for Apple.

Cook said that because most of Apple's production lines are in China, the new tariffs are causing significant damage to Apple. Samsung, as Apple's competitor, has most of its production activities in South Korea, which means that the Trump administration's new tariff policy will not affect Samsung.

Trump also believed that Cook provided a "very good example" and bluntly stated that Apple did "face difficulties" in competing with other companies after paying tariffs. However, Trump did not respond to how to change this situation.

American companies are flocking to China to make money, who are they slapping in the face?

Last Friday (August 23), US President Trump tweeted, "I hereby order our great American companies to immediately begin looking for alternatives to operating in China, including moving their operations back to the United States and producing goods within the United States. This will be a great opportunity for the United States..."

Screenshot from social media

However, a few days later, Costco, the largest membership supermarket chain in the United States, opened in Shanghai, China. In stark contrast to the concerns of the above retailers, despite the opening on a weekday, the parking lot waiting time was 3 hours, and the checkout line required 2 hours, Costco was still crowded with people in Minhang, Shanghai, only two days after opening. It even started to control the number of people entering the store, with a limit of 2,000 people in the store. The most incredible thing is that after the opening, Costco's market value soared by 56 billion yuan (7.8 billion US dollars)!

In addition to Costco, there are many American companies that currently hope to conduct business and invest in China.

"China is one of our most important markets globally." On July 21, Thermo Fisher Scientific, a medical device company and one of the Fortune 500 companies in the United States, also officially signed an agreement to increase investment in China and establish a new production base in Suzhou High-tech Zone, Jiangsu Province.

Pfizer, a world-renowned biopharmaceutical company, recently announced that it will locate the global headquarters of its new business unit, Pfizer Upjohn, in Shanghai. It is worth mentioning that this is the first time that Pfizer has established a global headquarters outside the United States.

Trump has always hoped that the United States would dominate, but China's outstanding performance in all aspects has made him worried. As the Sino-US trade war continues to escalate, Trump has become more and more accustomed to using "executive orders" to order American companies that have invested in China to "leave China." This time, Trump hit a "wall of iron." Including the US stock market and various industries are taking action to resist this order.