News

A new story in Reuters details how President Trump’s tariffs are hurting hundreds of small and large American businesses that are fighting for survival during the coronavirus pandemic.

Tariffs are taxes that American businesses pay to the federal government. Companies that were struggling to pay the President’s tariffs before the health crisis hit explain why these tariff payments are even harder to make now:

“Dan Digre, head of MISCO Speakers, was on edge before the coronavirus outbreak hit the global economy. Payment of hundreds of thousands of dollars in Chinese tariffs had wiped out the profit and dwindled the cash balance of the Minnesota-based loudspeaker maker. Now Digre is grappling with dropping sales and payment delays. With cash ever harder to come by, he must cough up the money for President Donald Trump’s 25% tariffs…” 

Many retailers are being forced to continue making tariff payments even though government mandates are keeping their doors closed:

As AFT spokesman Jonathan Gold said, “Companies are paying taxes on goods that they can’t sell right now for the stay-at-home orders.”

The unprecedented economic challenges created by the coronavirus outbreak and the President’s tariffs are forcing some businesses to temporarily cease operations or consider closing.  

“San Diego-based athleisure maker Vivacity Sportswear has been paying a 25% tariff on one-third of its raw materials that are sourced from China, leading to a 15% drop in profit last year, CEO Vivian Sayward said. In the past two months, the company’s revenue has dropped 80% and inventory has increased by 60%. Shrinking profit margins and depressed demand have compelled it to temporarily halt all manufacturing.”

The data is clear: the Trump Administration could free up billions of dollars for struggling U.S. companies by suspending or delaying tariffs. This much-needed cash could help revenue-starved businesses pay employees, suppliers, and other critical bills. Until then, American companies, workers, and consumers will continue to pay the price for President Trump’s trade war. 

WASHINGTON, D.C., (April 28, 2020) — Today, Americans for Free Trade urged President Trump to take further action to provide relief to struggling American businesses by delaying the collection of all duties and fees. The coalition of over 470 businesses also called on the Administration to expand its current program so that duties from May and June are also deferred. 

“The Administration’s announcement last week to defer the collection of certain duties for 90 days was a good first step, but many companies were excluded from this measure and will still owe significant duties to the federal government during a time of economic crisis,” said Americans for Free Trade spokesperson Jonathan Gold. “As hundreds of small and large businesses face urgent liquidity issues, we are calling on President Trump to go further and delay all duty payments to help give companies the cash they need to stay open, preserve American jobs, and be in a position of strength when the economy reopens.” 

The Administration could expand the current Executive Order and defer collection of all duties without waiting on authorization from Congress. As it currently stands, the Administration is only deferring the collection of some duties and only for imports made in the months of March and April. Deferring all duties for imports made in March, April, May and June would instantly free up billions of dollars for companies, many of which currently have little to no revenue, to use to pay employees, suppliers, and other critical bills. 

The Americans for Free Trade letter was signed by over 470 businesses and organizations of all sizes, representing retailers, manufacturers and other service providers, as well as farmers and ranchers.  

The full text of the letter may be found here and below:
 

April 28, 2020

The President

The White House

1600 Pennsylvania Ave., NW

Washington, DC 20500

Dear President Trump,

Thank you for your ongoing leadership to address the unprecedented economic challenges created by the deadly COVID-19 pandemic. Your leadership has included measures that have helped many businesses delay payments like income and payroll taxes to increase liquidity. The announcement to delay certain duties was another welcome step to help American companies stabilize their finances and buy time.

While this program will certainly benefit some U.S. companies, it will not benefit many others because certain important duties have been excluded and because it only covers imports made during the first half of March and April. While we understand the need to keep strong U.S. trade policies front and center, merely delaying the payment of these additional duties will not harm trade policy. The duties will still be paid, just at a later date. 

It is with this in mind that we make two urgent recommendations. First, we ask that you extend the program to cover imports made during May and June. Second, we urge that the program be expanded to defer the due dates for all duties and fees.

Combined, these two actions would immediately free up billions of dollars of working capital for American companies — like those listed below — to pay suppliers, employees, service providers and other critical stakeholders. This cash is even more important for companies that have had to close their doors because of stay-at-home orders, leaving them with little to no revenue to make ends meet.

Companies facing urgent liquidity issues need their duty payments deferred in order to succeed when the economy reopens. Deferring these duties will help further ensure the success of your Great American Economic Revival effort by giving companies the additional cash they need to stay open, preserve U.S. jobs and reopen their doors from a position of strength.

With future Congressional action uncertain, the American economy depends on your leadership and swift action. Your leadership alone can provide immediate relief to companies large and small from all sectors of the economy including manufacturers, retailers and other service providers, farmers and ranchers.

Sincerely,

WASHINGTON, D.C., (April 20, 2020) — Today, Americans for Free Trade spokesperson Jonathan Gold released the following statement regarding the Administration’s announcement to defer collection of certain duties for 90 days for businesses struggling during the coronavirus outbreak:

“The Administration’s announcement to defer the collection of some duties for 90 days is welcome news and a good first step to help provide temporary relief to American companies that are fighting for their survival during the coronavirus pandemic. Delaying the collection of certain duties will help free up cash for companies who desperately need it to stay afloat and preserve U.S. jobs.  While we thank President Trump for listening to the concerns of businesses and taking action to help them get through this crisis, many companies were left out of this measure and will still owe significant – and in some cases a crippling amount of – tariffs to the federal government at a time when they are struggling to survive an unprecedented economic shutdown. We urge the Administration to heed the call of hundreds of businesses and organizations to expand this Executive Order to all categories of tariffs, and delay collection of all duties for American companies.”

On March 18, 160 businesses and organizations, representing every part of the U.S. economy including manufacturers, farmers and agribusinesses, forest products, retailers, technology companies, service suppliers, natural gas and oil companies, importers, exporters, and other supply chain stakeholders, sent a letter calling on President Trump to suspend tariffs as part of the Administration’s emergency measures to help mitigate the economic crisis caused by the coronavirus outbreak.

The impact that COVID-19 is having on tariffs and trade continues to have severe consequences on the American economy.

Tariff worries have hit a record high amid the coronavirus outbreak.

“About seven in 10 people said they were at least somewhat concerned about tariffs in March, according to the latest survey from CivicScience provided first to Axios.” 

That’s the highest number reported since the company started tracking the data.

One of the most efficient actions that President Trump and Treasury Secretary Steven Mnuchin can take in order to help businesses survive is to defer tariff duties. PVH Corporation CEO Manny Chirico echoed this notion on CNBC’s “Squawk Box”:

“85% of our business is shut down and where the government could help is on the liquidity side.”

In CNN, Mary Lovely, professor of economics at Syracuse University and non-resident senior fellow at the Peterson Institute for International Economics, laid out several examples of why leaders in Washington should not overlook one simple and effective tool in combating COVID-19: suspending the remaining tariffs on Chinese imports.

“With Americans facing the unprecedented challenges of Covid-19 containment, and the deep recession that is expected to follow, it is time for President Trump to end a harmful policy that has outlived any usefulness.”

Former Wisconsin Governor Scott McCallum agrees. The governor wrote in Real Clear Politicsthat eliminating tariffs completely is a smart strategy for the Trump Administration to take in order to give American businesses and consumers relief during this pandemic:

“As President Trump considers plans to help the economy during this period, ending tariffs with a strong trade deal that holds China accountable should be on the table. In addition to other measures, it would provide immediate relief to many of those who are on the front lines of this health crisis.”

The time is now to end tariffs.

WASHINGTON, D.C., (April 2, 2020) — Today, Americans for Free Trade spokesperson Jonathan Gold released the following statement after the United States trade deficit dropped 12 percent in the month of February.

“A 12 percent drop in the trade deficit is significant and very troubling for the U.S. economy. What’s worse is that the decrease happened in February, before the surge of COVID-19 cases hit the United States. As the COVID-19 pandemic continues to have a profound impact on the economy, it is more important than ever for the Administration to provide as much relief as possible to American businesses, manufacturers and farmers so they can keep their doors open and employees working. We urge President Trump to provide tariff relief for companies who desperately need the liquidity to remain operational. This is an executive action that the president can take to immediately help U.S. companies and their employees.

###

BACKGROUND

The U.S. trade deficit shrank in February to the smallest in more than three years as imports declined more than exports ahead of the hit to global commerce from the expanding pandemic. (Jeff Kearns, “U.S. Trade Deficit Narrowed to a Three-Year Low in February,” Bloomberg, 4/2/20)

The trade war with China has cost American businesses, consumers, farmers, and manufacturers over $53 billion, according to data from Tariffs Hurt the Heartland. 

While President Trump has consistently claimed that China is paying for these tariffs, it’s simply not the case. And given the severity of the public health and economic crisis surrounding COVID-19, it is more important than ever that tariffs are lifted. But, as reported by the Wall Street Journal yesterday, the Trump Administration is brushing aside calls to put broad import tariffs on hold, despite pleas from the business community that it could help stimulate the increasingly rocky U.S. economy. 

Business owners have been calling for tariffs to be removed since the President’s trade war began because of the uncertainty and damage they cause. As Darryl Meattey, a small business owner in New Hampshire who voted for President Trump in 2016 wrote in the Concord Monitor: “…tariffs are slowly driving us out of business.”

Angela Carr, a small business owner in Pennsylvania has also been hit hard by tariffs. In fact, she has paid $500,000 in additional taxes because of tariffs. She shared in PennLive,

“We were thriving before tariffs – and we wanted to use our success to promote our goods to new markets, grow distribution, develop new products, hire additional staff, and give current employees increased compensation and benefits . . . but now, because of the tariffs, our cash has been so significantly impacted, these things are no longer possible.”

The Boston Globe highlighted how in Massachusetts, Delta Cycle owner Jeff Greenstein is unable to grow his business and has been forced to raise prices of his products because of the trade war.

“…my employees and my customers have done nothing wrong. So why are we being punished when we have nothing to do with this fight?”

Echoing the notion of uncertainty by tariffs, Reuters highlighted several other business owners across multiple industries that have been affected by tariffs. One of the most notable examples came from MISCO President Dan Digre, an audio equipment maker with 100 employees who has paid hundreds of thousands of dollars in tariffs.

“It just seems wrong. We’re not creating anything new. We’re spending all this time and money trying to deal with a problem that’s more or less self-inflicted.” 

The agricultural industry is especially being hit hard from tariffs. Recently, Minnesota farmer Tim Dufault testified at a House Ways and Means Committee hearing stating:

“…while you would be hard pressed to find a farmer who would disagree with the fact that China has been a bad actor, farmers have shouldered the pain for a strategy that has seen only one minor tariff reduction and several tariff escalations.”

It’s critical that President Trump provides immediate financial relief to American businesses and workers during this period of uncertainty. After all, as seen in RedState.com, the trade war could unravel President Trump’s economic accomplishments and cost him reelection in November.

WASHINGTON D.C., (March 18, 2020) — Today, Americans for Free Trade spokesperson Jonathan Gold released the following statement in response to President Trump’s comments at the White House press conference today where he suggested that other countries were behind Americans for Free Trade’s call to suspend tariffs: 

“This letter calling for President Trump to suspend tariffs was not sent by China, it was sent by a coalition of 160 American business associations representing thousands of American businesses and millions of American workers. The letter shares the concerns of US manufacturers, retailers, farmers and agribusinesses who have been paying for tariffs since the President’s trade war began.”

The full text of the letter may be found here.

WASHINGTON, D.C., (March 18, 2020) — Today, Americans for Free Trade called on President Trump to suspend tariffs as part of the Administration’s emergency measures to help mitigate economic harm caused by the coronavirus pandemic. 
 
“American farmers, manufacturers, and consumers have been paying for tariffs since the trade war began, and they’re hurting even more now from the economic effects of the coronavirus,” said Americans for Free Trade spokesperson Jonathan Gold. “The Administration should provide much-needed relief to businesses and families by suspending tariffs. This is an action that the Administration can take today without waiting on authorization from Congress, and we urge President Trump to act without further delay.” 
 
The letter was signed by 160 businesses and organizations, representing every part of the U.S. economy including manufacturers, farmers and agribusinesses, forest products, retailers, technology companies, service suppliers, natural gas and oil companies, importers, exporters, and other supply chain stakeholders.
 
The full text of the letter may be found here and below:
 
March 18, 2020
 
The Honorable Donald J. Trump
President of the United States of America
The White House
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20001
 
Dear Mr. President:
 
As you consider emergency measures to mitigate the economic harm from the spread of the coronavirus, Americans for Free Trade urges you to consider taking swift action on a policy that would provide tax relief to millions of American farmers, manufacturers, families, and consumers without having to wait on action from Congress: suspending the additional tariffs placed on certain imports under Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act.  These tariffs are taxes that Americans pay.
 
According to research by Trade Partnership Worldwide LLC, suspending the Section 301 and 232 tariffs currently imposed on imports from China, and China’s associated retaliation, would provide a boost to the U.S. economy of over $75 billion, or 0.4 percent of U.S. GDP, returning discretionary income to families, encouraging capital expenditures by private companies, and instilling market confidence in decisive action to address the current economic situation.  Moreover, as a set of policies that were implemented using executive authority, suspending these tariffs can be taken quickly and decisively by your Administration without further authorization steps from Congress.
 
Americans for Free Trade represents every part of the U.S. economy including manufacturers, farmers and agribusinesses, forest products, retailers, technology companies, service suppliers, natural gas and oil companies, importers, exporters, and other supply chain stakeholders, among them many small and family-owned businesses from across the nation.
 
Together, we urge you to provide tariff relief as one of the measures to help those hurting financially from the economic effects resulting from the current public health crisis.

Ahead of the Ohio primary, it is important to spotlight the many ways that tariffs have damaged the state’s economy, as well as the threat they continue to pose for businesses and communities across the United States. 

According to data from Tariffs Hurt the Heartland, Ohio taxpayers have paid $1.7 billion in additional tariffs since the beginning of the U.S.-China trade war. Trade plays a crucial role in the state’s economy, helping to support 1.4 million jobs across Ohio. What’s worse, the trade war could cost the state 76,500 jobs if no action is taken. 

This is precisely why candidates vying for the Democratic presidential nomination must tell Ohio voters their plans to remove all tariffs and finally bring an end to the harmful trade war. 

As Ohio businesses have experienced first-hand, the tariffs put in place by the Trump administration are taxes that are paid by Americans, not China. Walter Spiegel, chief compliance officer at Standard Textile, recently described to the Cincinnati Enquirer what the increased tariff costs mean for Ohio businesses:

“Tariffs are paid by the importer – that’s us, that’s not China … It’s taking cash out of the pocket of a company and paying the government. That’s less money to create jobs, expand, buy new equipment or to hire new employees.”

Unfortunately, as businesses continue to feel pressure from the trade war with China, those tariffs translate into higher prices for us all. Gary Yacoubian, who owns the Youngstown-based speaker company SVS Sound, described to Axios late last year what continued tariffs could mean for Ohio businesses and consumers in the year ahead:

“If the tariffs remain, I’m going to have to start making moves … Meaning: the consumer will pay, and I’ll pay, and then employees will pay, if we don’t grow according to plan.”

The Phase One Deal made important progress towards providing Ohio’s manufacturers and farmers some relief from the trade war, but much work remains to be done. Ohio and other swing states have been among the hardest hit by the trade war, and presidential candidates who hope to win in November need to show that they’re dedicated to ending tariffs.

If you are interested in speaking with someone about the trade war and how it is hurting Ohio residents ahead of the primary, please contact press@americansforfreetrade.com.

In preparation for the Arizona primary, it is important to remember the harm that tariffs have caused to the state’s businesses, communities, and families, as well as to hardworking Americans across the country. 

According to data from Tariffs Hurt the Heartland, Arizona taxpayers have already paid $436 million in additional tariffs because of the trade war. Beyond that, trade helps to support 746,700 jobs in Arizona, and 42,700 jobs could be lost in the state if the trade war continues.

Democratic presidential candidates have the opportunity to show Arizona voters that they are dedicated to protecting the state’s economy by laying out a plan to lift all remaining tariffs and bring the trade war to an end. 

If the tariffs that the Trump administration have put in place continue, many of the state’s key industries will be at risk. As the Arizona Daily Star reported, cotton and pecan farmers have been hit particularly hard by the trade war, with many already struggling to cut costs. Daniel Pacheco, Farm Manager at Pacheco Farm Management, spoke about trade’s importance to Arizona’s farmers:

“We’re just hoping the market’s going to turn and we can come to some sort of agreement with these tariffs … That’s the only thing holding the price down right now. China has all the manufacturing, so we’re kind of at their mercy as far as them wanting to buy our crops.”

Farming isn’t the only industry hurting because of tariffs. Speaking to KTAR last year, Arizona Chamber of Commerce President and CEO Glenn Hamer discussed how every industry in the state shoulders the burden:

“This will affect every sector of our economy, whether it’s mining, semiconductors. Agriculture always gets the brunt … It’s very, very important that the two leading economies in the world figure out a way to get to a good deal. End of story.”

Significant progress was made with the signing of the Phase One Deal, but much work still remains, which is exactly why all presidential candidates must commit to bringing an end to the trade war.

If you are interested in speaking with someone about the trade war and how it is hurting Arizona residents ahead of the primary, please contact press@americansforfreetrade.com.