Big business is throwing a pity party over Trump tariffs
The administration continues to move forward with imposing 25 percent tariffs on China.
This week, the U.S. Trade Representative will have an open mic for seven days of public comments on the new tariffs. That will be followed by a one-week period for written comments.
Let the whining begin.
Some 300 companies — largely retailers and apparel importers — are expected to testify against tariffs.
No surprise. These companies have made a fortune moving productive assets out of the United States to take advantage of cheap labor and government-subsidized factors in mainland China, building up that totalitarian regime in the process.
They made a bad business decision and they are now paying the price. No surprise they are complaining.
The Wall Street Journal previewed the pity party.
We learn from a New Hampshire fireworks retailer that he can’t find quality fireworks anywhere but China. The inference is that the tariffs will be extremely burdensome to his bottom line, or may result in, horror of horrors, “higher prices for consumers.”
Translated, that means the cost of blowing your fingers off on the Fourth of July could go up.
While the story presents the increased cost of imported Chinese firecrackers as an existential threat to American free enterprise, it leaves unanswered some key questions, such as, a) how much do consumers spend each year on the (absolutely discretionary) purchase of fireworks, and so, b) how much of a burden on consumers would this really be?
We learn that the fireworks were once manufactured in the U.S. but rising costs of insurance and regulation pushed the industry offshore.
This history actually validates President Trump’s three-pronged pursuit of regulatory reform, tax reform and trade reform to make America the best place on earth to do business.
Of course, the Journal failed to ask if it’s worth paying more for firecrackers to preserve America’s independence in the face of the expansionist ambitions of the Chinese Communist Party.
I suspect for most Americans the answer would be yes, particularly for those who enthusiastically celebrate Independence Day by setting off explosives in remembrance of the rockets’ red glare and bombs bursting in air that illuminated our Star Spangled Banner in an earlier (shooting) war fought over trade.
The Journal also heard from Scott Goldstein, president of S. Lichtenberg & Co, an importer that sells curtains at Walmart and Amazon.com. It used to manufacture in the U.S. but moved to China in 2007.
Now, like the boy who killed his parents then asks the court for mercy because he’s an orphan, Goldstein complains he can’t move production back to the U.S. because the textile mills and dye houses he used as suppliers (and left behind) are out of business.
Belying the vaunted ingenuity of the American entrepreneur, Goldstein said he doesn’t know if he could find people in the U.S. who could sew, or what he’d have to pay them.
Here’s a clue: you’ll have to pay them more than what you pay them in China, which is probably why you moved there in the first place.
We hear a facsimile of this complaint from the Bradford Exchange, importer of hand-painted tchotchkes from China, products made under licensing deals with Disney and sell for $200 a piece (another entirely discretionary purchase).
The company’s CEO bemoans the lack of a skilled American workforce. “‘There are very few people over here who want to do the type of detailed handwork on products that are sold to the middle class,’ said Tinberg, whose company records more than $400 million in annual revenue.”
If these companies cared about Americans, they would lobby Washington for training programs and an immigration system that prioritizes the skilled workers business needs.
But what Tinberg and Goldstein really mean is they can’t find people to do the sewing and “detailed handwork” at the price they want to pay for labor.
Or more precisely, at the price Walmart and the big retailers tell these chief-executives-in-name-only what to pay for labor.
It has been well documented that Walmart used its commanding retail market share to dictate to suppliers the price it would pay — the China price. If suppliers couldn’t cut their price by 30 percent, Walmart would introduce them to manufacturers in China who would help them do it, or it would show them the door.
These same mega-retailers are now demanding the administration hold off on China tariffs, and they are merely using small businesses and consumers as human shields.
The Juvenile Products Manufacturers Association — which would more accurately be called the Juvenile Products Importers Association — is shameless in this regard.
It says tariffs on cribs, high chairs and toddler car seats made in China “will undoubtedly result in fewer babies and toddlers having access to products critical to their safety.”
A more likely result will be parents using hand-me-downs or buying baby seats and cribs on eBay while manufacturers rebuild supply chains outside China.
Entirely missing in the tariffs discussion is any context of what’s really at stake here.
This is not about the price of sparklers, tchotchkes or window dressings.
It’s about the price of freedom.
Two million protesters who filled the streets of Hong Kong understand that.
And so do millions of Americans.
We were reminded of the sacrifices a previous generation made on the 75th anniversary of D-Day.
Now, another hostile foreign power threatens our way of life, and American are willing to sacrifice whatever it takes.
While big business is griping it may have to pay a little more because of tariffs, Americans understand others before us paid a far higher price.
Curtis Ellis is policy director with America First Policies. He was a senior policy adviser with the Donald J. Trump campaign.