The trade war between the US and China currently stands at tariffs on $50 billion in goods imposed by both sides, and could soon see billions more in goods drawn into the fray. The comment period on the proposed list for tariffs on another $200 billion in goods ended Thursday (Sept. 6) night, and the US must now decide what it will do next.
Nearly 4,000 comments have been sent to the office of US trade representative Robert Lighthizer, most of them seeking to get categories of products off the list, arguing that many of the proposed tariffs will lead to higher prices for consumers—or worse, to their businesses failing—because of their inability to source good alternatives in a timely fashion. Selected businesses and trade groups spoke before Lighthizer in over a week of hearings that started Aug. 20 and have produced some 500 pages of transcripts per day.
The public comments and transcripts offer a glimpse into multiple corners of the US economy that stand to be affected if the trade war deepens drastically. Over and over again, many US businesses echoed a common refrain: Nobody does what we need better than China.
Here’s a sample of their remarks.
Aaron Emigh, the CEO of Brilliant Home Networking, which recently started selling a smart-home controller that’s designed in the US and manufactured in China, explained that the quality and finish of products made in China is higher than other countries his company evaluated:
We did an evaluation of where we would build the device, before we knew about the tariffs, and looked at a lot of different countries as possibilities. China is unique for several reasons. First, the quality of construction that’s available in China is extremely high. This is very important for consumer products, where fit and finish is very important. And many of the low-cost countries, like Vietnam or Indonesia or places like that, we felt didn’t have the capability of building products to that level of fit and finish.
David Mathison is the cofounder of Leather Miracles, a firm based in the furniture hub of Hickory, North Carolina, that exports American hides to China to be turned into upholstery and finished furniture:
[T]he quality of the workmanship, the labor, in China is better than anyplace else in the world. We do business in other countries beyond China. We buy a lot of and bring a lot of leather from Italy. We bring a lot of leather from Brazil. We bring a lot of leather from places like India. But we have looked in many different places to make the handcrafted leathers that I mentioned earlier. But Chinese labor is way better and there is no comparison, and I would say if I was going to put together a team of labor it would – first, second, third, fourth and fifth choice would be China and nowhere else.
Ross Bishop, president of San Rafael, California-based Brightline Bags, a 10-year-old company that designs modular bags for pilots, asked the trade representative not to impose tariffs on trade category 4202, which covers a variety of suitcases, luggage, and handbags:
No other company is doing what we do. As with most companies in our HTS [Harmonized Tariff Schedule] category of 4202, our products are manufactured in China. The point of note here is not only have the Chinese been making most of the world’s nylon bags for a long time, but I can tell you firsthand from working with five different Chinese factories and from my many personal visits to them in China that they are really good. In fact, if you pick the right factory, as I’ve done, they are actually artists.
Speaking on the same product code on Aug. 20, Karen Giberson of the Accessories Council said:
We anticipate that certain other countries as India will be eventually an alternative to China for leather. However, they do not yet possess the resources, trained workforce, infrastructure, or capability to absorb the volume of product currently produced in China at the same quality and competitive prices.
Stephen Lang, of the American Bridal and Prom Industry Association, said the demand for ever-more embellished dresses requires a labor pool and skills that only China—he called their workers the “oil” of the global economy—can provide:
Nobody wants to do this work, and the reason it went offshore 30 years ago is the increasingly difficult issue of trying to make dresses for people with all the thousands of hand-sewn beads they want and not have to pay $10,000… I can’t find people that will do hand beading. I can’t make goods in Mexico. In our industry, $50 billion worth of volume comes out of China in terms of clothing – in Vietnam, $8 billion; Indonesia, less than $4 billion; India, less than $4 billion; Italy, $1.8 billion. If there were options to go outside of China, the entire world would. What we need to have done here you cannot—China’s the only place in town.
Sam Cobb, CEO of Real Wood Floors:
There are certain products that are produced in China that simply can’t be produced elsewhere… There is large-scale production of engineered flooring in America, but it is almost entirely low-end commodity production. Further, a substantial volume of what is identified as American-made engineered flooring is produced using prison labor. And while I appreciate what good prison industry programs accomplish, the fact that subsidized labor is a necessary component of U.S. flooring manufacturing gives a clue as to why products continue to be made elsewhere.
That said, several businesses also testified in favor of keeping certain products—and in some cases suggesting adding more, such as food packaging and outdoor gas grills—on the list.