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US trade entities express frustration over new tariffs on Chinese goods

(CRI Online)    08:02, August 23, 2018

US business and trade groups are expressing their frustration over the latest round of proposed tariffs on Chinese goods.

They are voicing their concerns at public hearings in the capital.

The Office of US Trade Representative first proposed a 10% tariff on about 200 billion of Chinese imports in July and later raised that rate to 25%. This week and next Monday a public hearing on the proposal is being held in Washington DC.

Most representatives at the hearing voiced strong opposition against the proposal, saying a tariff hike will result in a heavy burden on American companies, and ultimately rising prices for American consumers.

Bob Margevicius is executive vice President for Bicycle Product Suppliers Association and Specialized Bicycle Components in America.

"The biggest concern is that it impacts virtually all bicycles, in particular it impacts children's bicycles. The majority we import here in the US are children's bikes. Children's bikes are entry points for kids to get involved in cycling. They become immersed and they become part of it. It actually engages them for future usage of bikes and for the future being part of our industry. So we really need them."

Margevicius began his testimony at the hearing by asking the panelists if they still remember how exciting it was for them to get their first bike. When I asked him if adjusting the supply chain will be able to help them evade tariffs, he told me it won't be easy.

"Individual components are produced locally in China, whether through Tianjin, or Kunshan, or in the Shenzhen area. The products themselves need to meet safety requirements. So to transition from one country to another takes a lot of time to build the manufacturing cluster. It's a difficult and complex project for us."

Americans buy about 18 million bikes every year and most of these bikes come from China. Statistics show that if the US government were to impose tariffs on bikes and related products coming from China, the accumulative tariffs rate for American consumers will be as high as 36%. The even bigger concern is that this will cause bike retail stores to close, the bike industry to shrink, and people employed in the industry to lose their jobs.

An argument frequently raised by trade entity representatives at the hearing is that over the years China has developed a high level of craftsmanship and labor quality, which makes it very hard for them to find substitute makers in other countries in a short period of time.

Ross Bishop, once an engineer of major US defense tech company Lockheed Martin and a pilot, is now president of a company that produces specialized luggage for pilots. He said if you pick the right factory in China, the workers can be artists.

"We've worked with factories in Vietnam before. The products weren't as good and they ended up getting more and more expensive. So if you can work with the best force and with the best price, and it happens to be China, and that's what you are going to do."

Bishop also told me that his company was planning to expand its business, but the government's tariffs proposal is forcing them to slow down.

Besides all the frustration and anger from manufacturers in the country, the bigger worry is obviously placed on American households, who many argue will eventually pay for the protectionist trade approach by the government.

Lawyer Francis Sailer said "this is not a tariff that's going to in any way hurt China. It's gonna hurt Tom, Jones, and Bob, Smith, and the guys who have the startup companies that rely on the expertise that's been developed in China. So it's crazy."

The Office of the US Trade Representative said earlier that due to an unforeseen number of entities seeking to present their cases, the length of the hearing had been doubled. It's estimated that over 350 representatives from US companies and trade associations will attend the hearing. Written statements will be received till September 6th and after that the panel at the hearing will deliver a policy recommendation to the US Trade Representative.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Liang Jun, Bianji)

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