US companies ask Trump to drop tariffs

More than 200 US footwear companies called on President Donald Trump on Wednesday to cancel tariffs that are scheduled to go into effect on Sept 1, while a coalition of more than 160 US business organizations asked him to postpone all tariff increases on Chinese goods.

In a letter to Trump, the footwear companies said the tariffs will hit the majority of all footwear products from China and are "hidden taxes'' that will increase consumer prices.

The letter said the added 15 percent tariff on Sept 1 comes on top of tariffs that already average 11 percent and reach 67 percent on some shoes.

"This added 15% tax will cost US footwear consumers an additional $4 billion every year," the letter said, citing an estimate by the Footwear Distributors and Retailers of America (FDRA) trade group, which spearheaded the letter signed by companies including Adidas and Foot Locker.

In a separate letter to Trump on Wednesday, Americans for Free Trade, a coalition of more than 160 business organizations, asked him to postpone all tariff increases on Chinese goods, citing concerns about cost increases for US manufacturers and farmers. 

The coalition includes the National Retail Federation, the Consumer Technology Association, the Association of Equipment Manufacturers, the Toy Association and the American Petroleum Institute.

The group acknowledged Trump's "frustration with China" but said such tariffs would hurt workers and consumers and have an adverse impact on the American economy.

"Ordering companies to leave China, the world's second-largest economy, is not a solution and is unrealistic,'' the letter said. "Because many of our industrial inputs are still sourced in China, these new tariffs will act as a tax on US manufacturers and US farmers, whose costs will now increase."

Also Wednesday, Reuters reported that Apple Inc — which is facing the tariff on Sept 1 for China-made smartwatches and wireless headphones and for its best-seller the iPhone on Dec 15 — is still dependent on factories in China despite using factories in India and Brazil.

Apple uses only those factories to meet domestic demand, Reuters said, while its contract factories inside China have added more locations than outside the country, in part to produce additional products like watches, smart speakers and wireless headphones.

Of Apple's suppliers that manufacture chips, glass, cables and more, 44.9 percent were in China in 2015, and that rose to 47.6 percent by 2019, the company's supply chain data shows, according to Reuters.

The US on Wednesday moved a step closer to imposing an extra 5 percent on $300 billion of Chinese imports, many of those consumer goods.

The Office of the Trade Representative (USTR) on Wednesday said in an official notice that on Sept 1, the US Customs and Border Protection agency will begin collecting a 15 percent tariff on a portion of a list that contains more than $125 billion of targeted goods from China, including smartwatches, Bluetooth headphones, flat-panel televisions and footwear.

A 15 percent tariff will be levied on the remainder of the list, which includes cellphones, laptop computers, toys and clothing, from Dec 15, the agency said in a notice that will appear Friday in the US Federal Register, which announces changes to federal government agency rules and public notices.

Because Sept 1 is a Sunday, and Monday, Sept 2, is the Labor Day public holiday in the US, the USTR said the notice needed to be made before the weekend.

The Trump administration had previously planned to impose a lower 10 percent tariff on the $300 billion of imports, which represents nearly all the remaining US imports from China yet to be hit with US tariffs.

But Trump announced the tariff increase on Aug 23 on Twitter in response to China's decision earlier that day to impose retaliatory tariffs of between 5 and 10 percent on $75 billion worth of American products, including soybeans, pork, and, for the first time, crude oil.

China also reinstated the 25 percent penalty duty on imports of US-made cars and car parts, bringing the total tariff on the sector to 40 percent.