US business blasts Trump's tariffs

The US Chamber of Commerce, the world's largest trade federation, voiced its strong opposition to President Donald Trump's plan to impose sweeping tariffs on China.

Thomas Donohue, president and CEO of the chamber which represents more than 3 million businesses, expressed its understanding of the Trump administration's concern of impact of China's industrial policies and trade practices.

"But the US Chamber would strongly disagree with a decision to impose sweeping tariffs," Donohue said in a statement released on Thursday.

Concerns about a trade war between the world's two largest economies have grown in the last two days, with Reuters quoting White House officials on Wednesday saying that the Trump administration may in the coming week or two announce a $60 billion punitive tariff, targeting primarily China's technology and telecommunications products, for the country's alleged intellectual property violations. A Wall Street Journal report put the number at $30 billion.

The US initiated a Section 301 investigation under the US Trade Act of 1974 into China's intellectual property policies and practices last August.

"Simply put, tariffs are damaging taxes on American consumers," Donohue said, adding that tariffs of $30 billion a year would wipe out over a third of the savings American families receive from the doubling of the standard deduction in the tax reform, and if the tariffs reach $60 billion, which has been rumored, the impact would be even more devastating.

He said that tariffs could lead to a destructive trade war with serious consequences for US economic growth and job creation. "The livelihood of America's consumers, businesses, farmers and ranchers are at risk if the administration proceeds with this plan," Donohue said.

"We urge the administration to not impose these tariffs and to work with the business community to resolve the real and justifiable concerns raised by Chinese trade practices," he said.

The US China Business Council, a Washington-based organization representing more than 200 US companies in China, tweeted on Wednesday that its 2017 member survey found that most respondents believe that growth prospects in China are better than in other markets around the world.

In Beijing, Foreign Ministry spokesman Lu Kang vowed on Thursday to safeguard China's legitimate rights and interests in the case of a trade war, saying it will not accept unilateral game rules any country tries to force on the nation.

He made the comments when asked about the Trump administration's demand of China for a substantial cut of its trade surplus with the US.

The White House said on Wednesday that it is pressing China to cut its trade surplus with the US by $100 billion. US President Donald Trump confused the world with his tweet last week that the US demanded China cut the deficit by $1 billion.

Lu said that China and the US have been in contact with each other on how to deal with their trade frictions. "We hope that by making the pie of our cooperation bigger, these problems would be properly and constructively addressed," he said.

He emphasized that bilateral trade was mutually beneficial and China always honored its commitments and lived up to promises it made in a multilateral trade regime centered around WTO rules as well as bilateral and plurilateral investment agreements it inked with other countries.

"We will not accept unilateral game rules any country tries to force upon us," Lu said.

He said China still believes that the two countries can resolve their differences "through friendly consultations, and we sincerely want to do that".

"History teaches us that a trade war is in the interest of no one. If anything unpleasant does come about, though we all hope it never will, we are definitely determined to safeguard our legitimate rights and interests," Lu said.

The Trump administration has increased its pressure on China lately. On Wednesday, Larry Kudlow, who was appointed by Trump as the new director of White House National Economic Council, said China can expect the US to take a tough stance when it comes to international trade.

"I must say as somebody who doesn't like tariffs, I think China has earned a tough response not only from the United States," he said on CNBC's "Closing Bell". Kudlow has previously criticized Trump's steel tariffs as a "bad omen" and could cause a "major calamity".

There has been mounting pressure on the Trump administration protectionist trade policies especially after he signed proclamations last Thursday to impose 25 percent tariffs on steel imports and 10 percent tariffs on aluminum imports.

Jeff Flake, a Republican Senator from Arizona, continued to criticize Trump's tariffs as "bad policy". "I am a free trader. It's tough to win a trade war. Nobody wins trade wars," he said at the National Press Club.

Flake also blasted Trump's "flexible tariffs," saying, "How in the world can we convince other nations to enter into trade agreements with us if we act like that?" Flake introduced a bill on Monday to nullify Trump's steel and aluminum tariffs.

At a Senate hearing on Wednesday, US Agriculture Secretary Sonny Perdue expressed deep concern over a trade war, saying that agricultural goods are the "tip of the spear" in any type of trade retaliation.

He hoped the Trump administration "can mollify those and not move into and escalate into a trade war where agriculture will be damaged".

Senator Jon Tester from Montana also said that the agriculture industry in his state "without exception is unbelievably concerned about retaliatory actions....It's not a hit family farmers can take right now."