Over 300 companies are set to testify before the U.S. Trade Representative in Washington this week and voice their concerns on the escalating trade war between the U.S. and China.
The agency hearings will be held over seven days and feature representatives from a broad array of industries. Companies represented at Monday’s hearings included Best Buy, Roku, Kenneth Cole, and New Balance Athletics, among several others.
The hearings come as the government considers levying additional tariffs on $300 billion of Chinese imports, which has been widely criticized by politicians on both sides of the aisle and the private sector at large.
Just last week, 661 U.S. companies and trade associations sent a letter to President Trump and top cabinet officials urging the government to de-escalate trade tensions and avoid tariff hikes.
Tariffs “would represent a big hurdle to our business and our growth moving forward,” Joshua Simmons, the CEO of headphones start-up Culture Audio — a signatory of the letter — told Cheddar. They “will make us think about pulling back future investment, product releases, and even new jobs that we would add to the economy.”
The letter was spearheaded by Tariffs Hurt the Heartland, a nationwide free-trade coalition that includes over 150 trade groups across sectors ranging from tech to agriculture.
“We remain concerned about the escalation of tit-for-tat tariffs. We know firsthand that the additional tariffs will have a significant, negative and long-term impact on American businesses, farmers, families and the U.S. economy,” the letter read. “An escalated trade war is not in the country’s best interest, and both sides will lose.”
And while the trade war has largely been focused on Beijing’s policies regarding manufacturing and intellectual property rights, farmers are especially at risk, lawmakers say.
“They’re on the tip of the spear when it comes to this war. The rest of the country has to understand that if they want farmers to continue on, if they want them to survive, they’re going to have to get through this political issue that’s happening right now.” Sen. Mike Rounds (R-S.D.) told Cheddar.
Rounds stressed that agriculture — which operates at a surplus and relies on selling much of that surplus to China — has been a primary victim of the trade war, and that products like corn, soybean, and pork, which are produced throughout the Midwest, have been particularly targeted.
“If they’re going to be used in this battle, we need some help in getting them through, or they won’t be here,” said Rounds.
To ameliorate the pain felt by farmers, the Trump administration has formed trade assistance programs, including a $12 billion package in 2018 and another $16 billion program earlier this year. The trade assistance programs have been labeled “bailouts” by critics who regard the payments as the president wooing an industry that has largely supported his candidacy.
“They wanna see more trade, open trade, and they really don’t want to have a handout,” said Rounds, while still pointing out that they were needed to buy time.
But the trade war isn’t the only challenge facing farmers. Net farming income has still not recovered from its drop from 2013, when, in a single year, it fell sharply from from more than $120 billion. In 2019, the U.S. Department of Agriculture predicts that net farming income will land just over $69 billion.
Since taking office, President Trump has consistently railed against U.S. trade with China, which had a deficit of $378.6 billion in 2018, according to government figures. U.S. imports from China were $557.9 billion last year.
In early 2018, the White House announced its first round of tariff hikes, which have been broadened to various sectors in the subsequent months. The latest proposal — a 25 percent increase on an additional $300 billion of Chinese goods — would essentially blanket all Chinese imports with the increased duty.
The 25 percent tariff on all imports would be a “$140 billion-a-year hammer hitting the whole intricate supply chain of the world,” David Stockman, the former budget director under President Reagan, told Cheddar. “Donald Trump is a bull in a china shop when it comes to trade and trade policy.”
The hearings this week at the U.S. Trade Representative also come just two weeks ahead of the G20 Summit in Osaka, Japan, where Trump might meet with Chinese President Xi Jinping.
A Chinese Ministry of Foreign Affairs spokesperson refused to confirm a meeting between the two leaders on Monday, saying China “will release information on this in a timely manner.”
Trump and Xi did meet on the sidelines of the last G20 Summit in Buenos Aires, Argentina in December 2018.
Cheddar's Spencer Feingold contributed to this report.
