By Jacob M. Schlesinger
WASHINGTON -- The Trump administration is expanding the battlefield in its trade fight with China, moving beyond industrial goods to threaten tariffs for the first time on a range of consumer products that illustrates how dependent the vast U.S. consumer economy is on imports.
The list includes such retail items as bicycles, sound systems, dog food and leashes, pocketbooks, hammers and other tools. "They're not only hitting consumers' wallets, they're literally hitting wallets," said John Gold, vice president at the National Retail Federation, whose members rely heavily on low-price Chinese products.
Mr. Gold was referring to the inclusion on the new list of $200 billion in products under consideration for new 10% import taxes of "travel goods," a broad category that includes wallets as well as luggage. The American Apparel & Footwear Association estimates that more than 80% of that $31 billion sector is imported from China.
The range of products under consideration for new tariffs -- a 195-page list starting with "frozen retail cuts of meat of swine" and rolling through "ice hockey gloves," "carpets and other textile floor coverings" and "sewing machines" -- shows just how much the U.S. looks to China for consumer goods, as the world's most populous economy has developed into the world's factory floor.
The potential pain from disrupting that relationship has prompted a growing backlash within President Donald Trump's own Republican Party over his trade policies, with the Senate holding a vote Wednesday to try to curb his broad powers to block imports.
Many lawmakers are growing nervous, as Mr. Trump pressures both Beijing and allies in Europe. During a contentious NATO summit Wednesday in Brussels, the president demanded that Germany and others pay more for their defense to ease the financial burden on the U.S. He hinted the U.S. could rupture their 70-year postwar alliance if they didn't pay up.
In its escalating commercial conflict with Beijing, the Trump administration has so far tried to steer away from actions that would trigger obvious sticker shock on store shelves, focusing mainly on industrial components that would take months, if ever, before affecting the final price of goods.
That strategy, however, is proving increasingly difficult to maintain, as Mr. Trump doubles down on efforts to pressure China to alter its trading policies and practices, vowing to counter any Chinese retaliation with even bigger retaliation of his own.
"The first set of tariffs was civilized in terms of our industry," said Rick Helfenbein, head of the apparel trade group. "This one is a deviation -- we've been smacked right on the head."
A senior administration official said in unveiling the list Tuesday night that "we did try to take into account the potential impact on consumers" in honing the next phase of their tariff strategy. He added that the goal wasn't to raise the price of imports but "to encourage China to change its behavior."
As Mr. Trump subjects a growing portion of the American economy to import restrictions -- and the threat of countermeasures by trading partners against American exports -- the Senate voted 88 to 11 Wednesday on a motion aimed at curbing the president's broad powers to impose tariffs.
The vote was mainly symbolic, since the measure wasn't binding and offered a vague plan requiring "a role for Congress" in certain tariff decisions. Still, that Senate leaders allowed a rare vote on a measure attacking an administration action, the first over trade, was "a clear rebuke of this administration's trade policy," said Arizona GOP Sen. Jeff Flake, one of Mr. Trump's strongest Republican critics.
The new $200 billion import target list is the latest step in Mr. Trump's trade battle with China, launched earlier this year after a monthslong administration investigation concluded that the Chinese government and Chinese companies had systematically and improperly pressured U.S. companies to turn over valuable intellectual property.
As punishment for those practices, Mr. Trump imposed 25% tariffs on $34 billion in Chinese imports on July 6, and has scheduled another $16 billion will get hit later this month.
China swiftly retaliated by imposing its own tariffs on U.S. imports, and the new $200 billion list from the administration is intended as counter-retaliation. Those tariffs wouldn't be imposed until after public hearings scheduled for late August.
Mr. Trump has said he is willing to impose tariffs on yet another $200 billion of Chinese imports if Beijing retaliates again -- which would mean the vast majority of what the U.S. buys from China would be hit by duties. China sent $523.7 billion in products to the U.S. last year.
Write to Jacob M. Schlesinger at email@example.com
(END) Dow Jones Newswires
July 11, 2018 16:51 ET (20:51 GMT)
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