Press Release: CPA Praises Implementation of Tariffs on $200 Billion of Chinese Imports

September 18, 2018

Necessary response to China’s continuing unfair trade practices

Washington. The Coalition for a Prosperous America (CPA) today strongly praised a White House announcement of additional tariffs on approximately $200 billion worth of Chinese imports. The tariffs, which take effect on September 24, are part of the Trump administration's continuing response to China’s theft of intellectual property and forced transfer of US technology. The tariffs will initially be imposed at 10 percent, but will increase to 25 percent on January 1, 2019.

CPA Chairman Dan DiMicco said, “This is a very welcome announcement. President Trump initially imposed tariffs on $50 billion of Chinese products. However, Beijing refused to acknowledge their persistent technology theft or to change course, and instead retaliated against fairly traded US goods. These additional tariffs will make clear that China must change its egregious behavior. The tariffs will also provide time for US companies to shift their supply chains toward domestic producers.”

In July and August, the administration imposed 25 percent tariffs on $50 billion worth of Chinese goods. The tariffs followed a lengthy Section 301 investigation of discriminatory trade practices related to foreign investment restrictions, technology transfer, and cyber intrusion. Implemented as part of existing US trade law, the tariffs sought to change China’s wrongful behavior. However, Beijing chose not to admit wrongdoing and change course, but rather to retaliate against fairly traded US goods.

“These tariff actions are a necessary response to China’s refusal to end dozens of commercial espionage and technology transfer practices,” said Michael Stumo, CEO of the CPA. “Our member companies have faced years of heavily subsidized competition from China, and they’ve experienced firsthand the aggressiveness of China’s hacking and intellectual property theft campaign. Our members have also had to confront the side effects of subsidized imports still affecting downstream markets. We see this, for example, with companies that produce products made from steel and aluminum. We’re pleased that the administration is now addressing this wider problem, and these broader tariffs will help to minimize distortions that come from partial tariff coverage.”

Stumo says that CPA’s member companies are doing well in an expanding economy and are investing in capital equipment, hiring workers, and working with new businesses moving back to the US. CPA believes that the administration’s strong focus on trade is helping to drive this growth.

“The US economy continues to do well,” said Stumo. “This is what happens when the nation shifts away from the destructive pursuit of cheap, subsidized imports over the past 20 years. The focus now should be on improving US productive capacity and growing middle class jobs.”

DiMicco adds, “President Trump has made clear that it’s up to China to change its behavior. Tariffs will help to compel Beijing to accept a comprehensive agreement on trade. But if China retaliates again, we fully support steps to add tariffs on another $267 billion of imports.”

The Coalition for a Prosperous America is a non-partisan, nonprofit organization representing the interests of 4.1 million households through agricultural, manufacturing and labor members.

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  • TopTadeFairs
    Stumo says he’ll be urging the administration to look at exchange rates and excessive dollar overvaluation.
  • Bruce Bishop
    China’s advantage is that they look to the long term — fifty years, a hundred years. Our CEO’s look to the next quarter, and our politicians look to the next election. There is no way that a short-term plan will prevail over a long-term plan.
  • Bruce Bishop
    The tariffs will help, a little. The problem with tariffs is, that China’s cost advantage — which is ten to one across all cost factors — not just labor, will allow them to absorb any tariff that Americans would find politically tolerable. At bottom, all manufacturing cost factors — labor, material. overhead, energy, and regulatory compliance (China has none), are made up of “labor,” or “salaries,” all of which are about one-tenth of ours.

    The only sure way to balance our trade with China is to implement Warren Buffett’s 2003 proposal for forced “Balanced Trade.” You can Google “Balanced Trade,” and Buffett’s article is archived at the bottom.

    All that tariffs will accomplish will be to convince the Chinese that Trump is serious about cutting our trade deficit. They also know that, if they wait out Trump, our next president will likely be some wishy-washy politician who won’t have the cojones to stick to the tariffs — so everything will revert to “normal,” until China totally “owns” the United States.

    If you haven’t read “Death by China,” it’s unlikely that you fully understand the crisis we are in.