The President of the U.S. Chamber of Commerce has warned that while the Trump Administration was right on it’s focus on China’s industrial policies and unfair trade practices which unfairly impacts the U.S. economy, the current tariffs approach will do more harm than good.
In a significant development, Thomas Donohue, the head of the most influential U.S. business lobbying group has warned the U.S. Administration that the imposition of unilateral tariffs on Chinese goods is likely to lead a destructive trade war that will hurt U.S. economic growth as well as American consumers.
Donohue, the President of the U.S. Chamber of Commerce said such tariffs, associated with a probe of China’s intellectual property practices, would be “damaging taxes on American consumers.”
These comments come in the wake of Peter Navarro, the White House trade adviser stating that Trump would, in the coming weeks, get options to address China’s “theft and forced transfer” of American intellectual property as part of the investigation under Section 301 of the U.S. Trade Act of 1974.
Donohue stated while the Trump administration was right in focusing on the negative economic aspects of China’s industrial policies and unfair trade practices that unfairly impacts the United States, however, the tariffs approach were wrong.
“Tariffs of $30 billion a year would wipe out over a third of the savings American families received from the doubling of the standard deduction in tax reform,” said Donohue. “If the tariffs reach $60 billion, which has been rumored, the impact would be even more devastating,” said Donohue while urging the administration not to proceed with such a plan.
He went on to add, “Tariffs could lead to a destructive trade war with serious consequences for U.S. economic growth and job creation,” hurting consumers, businesses, farmers and ranchers.
While speaking on CNBC television, Navarro said the remedies in the “Section 301” probe were among “many steps that the president is courageously going to take in order to address unfair trade practices,” while adding, “I don’t think there’s a single person… on Wall Street that will oppose cracking down on China’s theft of our intellectual property or their forced transfer”.
Navarro, a key architect of the aluminum and steel tariffs, which were announced last week by Trump, opined that such tariffs will not necessarily provoke a trade war.
“We can obviously do it in a way that can be good for the American people and good for the global trading system,” said Navarro. “We can do this in a way that is peaceful and will improve and strengthen the trading system… Everybody on Wall Street needs to understand: Just relax.”