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Businesses Band Together to Battle Trump Tariffs

Unity may not always be the easiest thing to come by, but one thing disparate parties can always rally around is something they don’t like.

In this case, that disliked thing is Donald Trump’s tariffs.

A coalition of retailers, manufacturers, farmers, tech companies, imports, exporters and other stakeholders in the supply chain are working together to “quickly mitigate” the current trade situation between the U.S. and China before things get worse.

In a letter sent Wednesday, the coalition took to urging members of Congress to ensure U.S. consumers don’t end up paying the price for China’s “bad behavior.”

“We agree that China’s ongoing intellectual property rights violations, forced technology transfers and state interventions harm U.S. companies, workers, consumers and our competitiveness,” the group of 107 organizations, including the American Apparel & Footwear Association, National Retail Federation and the Association of Equipment Manufacturers, wrote in the letter. “We are concerned that the proposed tariff list, and escalating tariff threats made by the administration, however, will not effectively advance our shared goal of changing these harmful Chinese practices.”

Both China and the U.S. have suggested two sets of tariff targets, the U.S. largely aiming steel, aerospace and information technology from China, and China squaring off with tariffs that would hit U.S. farming and manufacturing. The products on each of the lists could face tariffs as high as 25 percent.

Reiterating that tariffs are simply hidden taxes, the coalition of retailers and organizations are concerned that U.S. companies and consumers will pay higher prices for everyday product. And more than that, U.S. proposed tariffs on Chinese manufacturing machinery and parts would hit U.S. manufacturers trying to make in America.

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“Higher costs for manufacturing will result in less production here in the U.S. If imposed, these tariffs will result in higher prices for American consumers and fewer jobs for American workers,” the letter noted. “While the tariffs are not yet in effect, the possibility of imposition of tariffs on billions of dollars of goods, the as-yet-undefined potential investment restrictions and threats of a potential trade war create unpredictability across the business and farm community here in the United States, depress commodity prices, and have already harmed U.S. companies, farmers, consumers and markets.”

Supply chains, as the letter made clear, cannot be established overnight, and the uncertainty leaves businesses at the whim of Trump’s tweets or China’s retaliations. And the administration doesn’t seem to have accounted for the role of global supply chains in creating product, according to the letter.

“These complex supply chains can take years to establish, and in some instances rely on suppliers who bring unique capabilities that cannot be replaces. Even in those instances where sufficient alternative suppliers may exist, supply chains cannot be shifted to different countries or facilities without compromising contracts, compliance, quality and value for the consumer,” the letter went on. “Moreover, if U.S. companies had to try to shift production to different countries in concert, they would face capacity constraints and likely higher prices from suppliers in those countries. Such disruptions would likely drive inflation up in the United States.”

Though none of the proposed tariffs have taken effect yet, a trade war isn’t off the table and the tit-for-tat may have yet to subside. On Tuesday, China’s President Xi Jingping promised to open up China’s economy, cut tariffs for autos and improve the country’s intellectual property actions, but right on the heels of Xi’s speech, China said it wasn’t a concession to the U.S. and that it would be willing to hit back again if and where it had to.

From the U.S. side, things are likely to remain status quo until President Trump gets what he wants.

“I think what’s going to happen is we are going to have negotiations at some point. There may be tariffs before, maybe not. We shouldn’t panic,” Trump economic advisor Larry Kudlow told CNBC Wednesday. “So far there have been no tariffs implemented…and you’re not going to see any of that for probably a couple of months.”