Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Clamor grows for Trump to cut China tariffs in coronavirus response

Published 03/13/2020, 06:26 AM
Updated 03/13/2020, 06:26 AM
© Reuters. U.S. President Donald Trump delivers remarks to the news media during a meeting with bankers on COVID-19 Coronavirus response, inside the Cabinet Room at the White House in Washington

© Reuters. U.S. President Donald Trump delivers remarks to the news media during a meeting with bankers on COVID-19 Coronavirus response, inside the Cabinet Room at the White House in Washington

By David Lawder and Andrea Shalal

WASHINGTON (Reuters) - As President Donald Trump scrambles for new ways to cushion the economic blow from the fast spreading coronavirus, industry groups, lawmakers and even some government officials are reviving a previous request: cut tariffs on Chinese and other imported goods.

Anti-tariff forces both outside and inside the government see the virus crisis as the biggest opportunity for rolling back at least some import taxes since a U.S.-China "Phase 1" trade deal was reached in December.

They say repealing a Trump protectionist policy could save American companies and consumers billions of dollars and send a positive signal to investors, who sent U.S. stocks down about 10% on Thursday into bear market territory.

Tariffs of up to 25% remain on some $370 billion worth of Chinese goods imports annually. U.S. importers were billed for $48.1 billion in duties on Chinese goods from the Trump administration's "Section 301" tariffs over the past 20 months, according to U.S. Customs and Border Protection.

"This is a tax that is fully within the authorities of the executive branch, so they can very quickly give American businesses and American consumers a tax cut by lifting the tariffs that are in place," U.S. Representative Stephanie Murphy told Reuters on Thursday.

The Florida Democrat urged U.S. Trade Representative Robert Lighthizer on Wednesday to declare a trade "detente" by removing tariffs on both Chinese and European goods to aid small and medium-sized businesses.

Lighthizer, who for three years has led the Trump administration's efforts to impose tariffs on Chinese goods, "was not receptive to the idea" during a closed-door meeting with members of the House Ways and Means Committee, Murphy said.

USTR did not respond to a request for comment.

The U.S.-China Business Council is also pressing for tariff reductions by both China and the United States as a way to help both economies weather coronavirus pressures.

"Both economies are suffering from a common challenge," said USCBC President Craig Allen. "Both sides should use this as an opportunity to rein in the self-inflicted damage that tariffs cause."

But there were differing views on tariffs within the Trump administration, Allen said, with "no clear consensus on moving forward with a tariff reduction no matter how obvious it may be that it's in both countries' interest."

ELECTION LOOMS

Trump has touted his tough stance on China trade as a key differentiator from Democratic challengers in the November presidential election. Keeping tariffs in place on Chinese goods allows him to say he is maintaining leverage over China for a Phase 2 trade deal.

But rapidly deteriorating financial markets and worries that COVID-19, the disease caused by the new coronavirus, will grind worldwide economic activity to a halt may be changing some trade thinking inside the administration, said a person familiar with White House trade deliberations.

"It's not likely to happen" because of the election argument, the person said. "But COVID has changed a lot of things and industry sees an opening here."

Before the coronavirus significantly reduced its global forecasts, the International Monetary Fund had estimated that U.S. and Chinese tariffs still in place after a Phase 1 trade deal would reduce 2020 global economic output by about 0.5%, or around $450 billion.

The National Association of Manufacturers on Monday published a coronavirus action plan that urged the administration to "develop a targeted list of products for which Section 301 tariffs and retaliatory tariffs can be suspended or removed to spur economic growth and job creation."

U.S. Treasury Secretary Steven Mnuchin continues to advocate tariff reductions as a way to further economic growth, said Derek Scissors, a China policy expert at the American Enterprise Institute.

"The Wall Street representatives in and out of the administration constantly push for tariff cuts, from the time the deal was struck through last week," Scissors said. "The risk of a trade deficit jump later in the year, as the China tries to export its way to a V-shaped recovery, has blocked them."

Mnuchin told lawmakers last week that tariff reductions were not being considered at that time but as the situation progresses, "we'll look at all the options that we think are important" to aid small firms and certain sectors of the economy.

White House trade adviser Peter Navarro, the administration's loudest anti-China voice, tamped down any speculation that tariffs might be lifted.

"There are no discussions within the White House about that. That is simply a fake news gambit by the usual Wall Street suspects who never met an American job they didn’t want to offshore for the sake of a buck," he said.

Even economists who support lifting tariffs say it may not be effective as a short-term stimulus.

© Reuters. U.S. President Donald Trump delivers remarks to the news media during a meeting with bankers on COVID-19 Coronavirus response, inside the Cabinet Room at the White House in Washington

"Permanently lifting the tariffs on China is a good idea," said Heritage Foundation economist Paul Winfree. "Rapid changes in trade policy linked specifically to the pandemic might not give them the bump they want because it will contribute to the long-run trade uncertainty that has depressed growth."

Latest comments

It is not possible to defeat the growing leadership of China by putting tariffs on the USA which is to give us a shot in the foot. The world is very big. A global blockade, unthinkable today, would be necessary. The USA knows how to win and has won in the past, assuming, on the contrary, a strong leadership in free exchange, education, innovation, investment and productivity. All of this characteristic of intelligent and visionary minds such as Musk, Nadella, Jobbs, etc. Only narrow and sick minds are in favor of taking refuge at home watching the enemy grow
actually, the protectionist policies that Trump deploys are leftist which is why Sanders/Warren both support Trump in this. Free markets are a conservative, historically Republican view that has been infultrated by an economic liberal like Trump. Dont forget he was a Democrat for longer than he was a Republican. He’s brought his leftist economic views with him.
agree with Trump on this or not, but to call it leftist ideolgy just shows how ignorant your views are and simply skewed to bash any view contrary to Trump, who is (make zero mistake about this) as economically liberal as they come.
since when is nationalism "leftist"? I have no idea where you get you ideas from but that's dead wrong.
Obviously, the simplest and most immediate way to fight the current crisis, of the economy and the markets, is to abandon Trump's dire policy of tariffs with China and other countries. Cut the pernicious influence of individuals like Navarro, Liztigier and the clique that manages the government's Commerce area. It is an elementary principle of economic theory demonstrated 100 times that its benefits are purely illusory for the rulers and the own States and do not subdue foreigners. It is an unbearable burden for both companies and individuals. It has no net benefit to the nation
Thou think you're smart and moe intelligent than us? Perhaps but I was in NYC when a loathsome in individual allowed China into WTO. One of the most insane decisions ever made.You are of the elitists who are the loathsome ones. I abhor you & your ilk.
Ro me, it's "your kind" that have created this problem in the first place. Speak like type more educated so that people should simply believe you because you imply you're smarter. Well I wad in NYC when that idiot Bush passed Chins being let into WTO. I was totally against it. Now, Bush, the anti Trumper? I loathe him and his ilk, like you who don't care about the threat from the communist nation that harvests human organs like crops. This is, to me as "Obvious" as to you-
When it comes to tarriffs, who wants me to fire up my China Roar again and Trump poking at the China Lion again? Lol
their idea of out of poverty is still worse than the standard of living in the USA. 🤣 the people have no choice to not support their government. they either get put in a reeducation camp (jail) or they disappear (killed). they have NO idea what Freedom is like!!!
yes, Hi Me Comment...
HiMe - You and Ed should date -
Trump better act fast and cut the tarriffs, if not 100% sure these companies will have to start cutting staffs, reduce investing, and possible we will see bankruptcies soon. If he waits another 2 to 3 months, we will face a deep recession.
You're a broken man if you can actually call yourself such.
China lied to us about this virus and destroying the world and now anti Trumpers want USA to reward China also?
Wow wow wow... U sure are a different breed from planet earth
you are correct trader trader
Nothing like being a commie, right chewy?
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.