American families could pay hundreds more per year for goods and services and tens of thousands of jobs could be lost if the Trump administration forges ahead with additional tariffs on automobile imports and Chinese goods, according to a study released by a coalition of trade groups spanning the consumer sector.
Tariffs Hurt the Heartland, a coalition of more than 150 trade groups from retail, fashion, agriculture and other industries, outlined different tariff impact scenarios in a Feb. 6 report. In one of the most likely scenarios — one that takes into account an increase in tariffs to 25% on Chinese good in March, combined with existing punitive tariffs on metals imports and retaliatory tariffs on U.S. exports — the estimated job loss would be 934,700 in the U.S., according to the report. Under that scenario, the additional cost for an average American family of four would be about $767 in annual goods and services. The gross domestic product would also be lowered by 0.37%, according to the study.
The estimated impacts in the report are based on all looming tariff threats as of Nov. 1, 2018, as well as existing tariffs, being in place for one to three years.
In a worst-case scenario, more than 2.23 million jobs would be lost, GDP would fall 1.04%, and the average family of four would pay $2,389 more annually for goods and services, according to the report. That scenario takes into account a potential tariff rate hike on $200 billion of Chinese goods, the imposition of a 25% tariff on automobile imports and the imposition of threatened tariffs on the remaining $267 billion of imported Chinese goods.
The coalition also warned that the tariffs could, in some instances, erase the corporate and individual gains made under the sweeping tax reform legislation enacted in January 2018.
"When you look at the pluses and minuses, the minuses vastly outweigh the positives," said Laura Baughman, president of Trade Partnership Worldwide, LLC, the economic research firm that helped produce the report.
The U.S. and China are scrambling to reach a deal by end-of-day March 1, which marks the end of a 90-day detente between the two countries where no further tariffs will be imposed. If a deal is not reached by that date, President Donald Trump said he will immediately raise to 25% a 10% tariff on $200 billion of Chinese goods imposed in September 2018.
The Commerce Department is also set to release its findings from a Section 232 investigation into U.S. automobile imports on national security grounds, which could lead to a 25% tariff on vehicle imports.
In a press conference held in conjunction with the report release, several U.S. senators criticized the Trump administration’s approach to addressing underlying issues with China, including its forced technology transfer of American companies doing business there and the cyber and physical theft of American intellectual property.
Speaking at an event on Capitol Hill, a bipartisan group of senators said that China’s unfair trade practices need to be addressed, but all took issue with the Trump administration's strategy.
Sen. Tom Carper, a Delaware Democrat, compared the situation to a warning he commonly finds when riding a commuter train.
"We’re seeing something that we don't like," Carper said at a podium of products that have been impacted by the trade spat, including light bulbs, a television remote control, children’s toys and a wireless thermometer. "We’ve got to be tough on the Chinese. But we’ve got to be smart and not hurt our own farmers."
Sen. Pat Toomey, R-Pa., said the Trump administration’s 25% tariff on U.S. steel imports and 10% tariff on American aluminum imports invoked on the grounds of national security in March 2018 has already had a material impact on his metal-producing state.
“Tit-for-tat tariffs can be very, very dangerous,” said Toomey, a co-sponsor of the Bicameral Congressional Trade Authority Act, a bipartisan bill introduced Jan. 31 that would limit the president's unilateral powers to impose tariffs on other nations and instead delegate approval to Congress.
"I think more and more members of Congress, both the House and the Senate, are becoming aware of the problem and more intent about doing something about it," coalition spokesman and former lawmaker Charles Boustany said at the event.
The event also featured several small-business owners who say they have been casualties of the various trade spats.
Michael Rinzler, owner of Bristol, Pa.-based Wicked Cool Toys, said that his company, which makes toys including Pokemon and Cabbage Patch dolls, would be forced to raise prices like many other toy producers, and he estimated "tens of thousands" of job losses in the global industry.
Richard Wilkins, a Delaware soybean farmer and president of the Delaware Farm Bureau, said retaliatory tariffs by China on U.S. soybeans have led to a vast reduction of the bean's exports, and that he expects 20%-25% of the 4 billion bushels of soybeans exported in 2018 to be still sitting in silos when the 2019 crop is harvested.