Tariffs & Trade

Try Trumping these trivial trade tribulations

American manufacturers are on high alert right now. The industry’s outlook is uncertain due to the current trade negotiations with China, which have ratcheted up in 2019 and especially over the past month. Starting with a list of relevant items from this week’s proposal of modifications from the U.S., here are some materials to be aware of for EA readers: multiple varieties of iron, nonalloy steel and wire; aluminum (which was already being taxed but risks seeing another hike); municipal waste, sewage sludge, and clinical waste; many variations of vulcanized rubber, including conveyor belts reinforced with metal, tires, medical gloves, caps, seals, lids, and stoppers; tons of textiles; and base metal clad.

Negotiations between President Trump and China’s Xi Jinping failed to reach an accord before an already extended May deadline. Last Friday (May 10), Trump raised tariffs to 25 percent on a $200 billion list of U.S. products being imported to China. On Monday, China announced it will raise tariffs 25 percent on $60 billion in U.S. goods in retaliation. The Chinese-imposed tariffs are set to take effect on June 1. Predictably, an ensuing proposal by the United States was rolled out in response to that later that same day. In addition to creating strife and nervousness in the U.S. stock market, manufacturers of a number of industrial materials—steel, iron, and aluminum—are wary of the situation; it not only complicates the already-tenuous trade relationship with China, but jeopardizes the new North American trade deal with Mexico and Canada:


“Everything from the mundane to the practical to the exotic — washing machine parts, dining room sets, horsehair waste — is on the growing list of products that, as of Friday, are scheduled to carry a 25 percent tariff to import from China,” the Chicago Tribune reported Monday,  in an article detailing how the well-known Walter E. Smithe furniture company of Itasca, Ill., is an example of manufacturers having to suddenly account for unexpected costs.

The full list (143 pages in a PDF) of proposed items that could be slapped with tariffs was released May 13 by the White House. It also includes the following:

-“Printed trade advertising material, commercial catalogs and the like”

-Tarpaulins, awnings, and sunblinds

-Ceramics, stemware, glassware

-A number of agricultural-related items (soybeans from before), causing discontent among farmers

“DATES: To be assured of consideration, you must submit comments and responses in accordance with the following schedule:June 10, 2019: Due date for filing requests to appear and a summary of expected testimony at the public hearing.June 17, 2019: Due date for submission of written comments.June 17, 2019: The Section 301 Committee will convene a public hearing in the main hearing room of the U.S. International Trade Commission, 500 E Street SW Washington, D.C. 20436 that begins at 9:30 a.m.Seven days after the last day of the public hearing:Due date for submission of post-hearing rebuttal comments.”—from official White House doc

Important: many of these tariffs—and the proverbial ‘trade war’—have been active for over a year, at least…including those on major metals like steel, iron, and aluminum, as well as soybeans. There were two recent waves of tariffs. One was implemented last week, this week’s release is a proposed outline for new ones, as well as increases on some of the aforementioned.

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