The latest: For Wisconsin company, tariffs mean price hikes
The Associated Press
Published Friday, May 10, 2019 7:02AM EDT
Last Updated Friday, May 10, 2019 1:22PM EDT
WASHINGTON - The latest on the tariffs standoff between the United States and China as trade talks are underway in Washington (all times local):
Electronic Specialties Inc. in southern Wisconsin already increased prices on their products last year during the first wave of tariffs and will have to do so again. President Steve White is concerned about how customers will react.
"Probably the main thing is customer relations -- trying not to upset them too much when we have to increase our prices," he says.
The company imports some testing instruments from China for the automotive industry, such as electrical diagnostic tools for mechanics.
Last year when 25 per cent tariffs were imposed on Chinese imports, the company had to absorb some of the cost and only increase prices by 15 per cent. This time, with the new tariffs on imports increasing from 10 per cent to 25 per cent, White anticipates prices on those products will go up by about 8 per cent.
"We have to figure out how to adjust to it -- how we go to our customers and request a price increase is difficult," he says.
The company in Genoa City, Wisconsin employs 10 people and so far has not had to deal with layoffs, but the higher prices has slowed their business, White says. He declines to say by how much.
Ford spokeswoman Rachel McCleery says the company is most concerned about any retaliatory tariffs China might impose.
The Dearborn, Michigan-based company says 80% of the vehicles it assembles in the U.S. are sold domestically, but it does export some vehicles to China.
"While most of the vehicles we sell in China are built in China, Ford does export a number of vehicles to China from the U.S.," McCleery says. "Our biggest concern are impacts retaliatory tariffs would have on our exports and our expanding customer base in China."
Meanwhile, Toyota spokesman Scott Vazin, says the company is "currently investigating the impact on our global operations."
Toyota has in the past been outspoken against tariffs that could affect imported auto parts, warning it would raise production costs and lead to higher vehicle prices for U.S. consumers.
A trade association whose members include the biggest U.S. tech powers says the hike in tariffs on Chinese imports will aggravate an already "significant toll on U.S. businesses, workers and consumers."
In the tech realm, the Information Technology Industry Council says in a statement Friday that the tariff boost from 10 per cent to 25 per cent on $200 billion in imports will affect telecoms equipment including modems and routers.
It says it will mean "that companies large and small will find it more difficult to use digital and cost-saving solutions in their daily business."
The UN chief says "no winners" emerge from rising trade tensions, which over time amount to a "major setback" to efforts to keep the world on a path to economic prosperity while preserving the environment.
Secretary-General Antonio Guterres made no reference to a spike in U.S.-China trade tensions during his long-planned speech at the World Trade Organization.
Instead, Guterres offers general comments about "growing discontent with globalization" and says the escalating trade tensions over the last year could threaten "the very foundation of the rules-based multilateral trading system."
He says that "when trade tensions rise, there are no winners, only losers, especially among developing countries."
U.S. President Donald Trump says his administration is beginning the process to impose 25% tariffs on another $325 billion in Chinese imports, covering everything China sells the United States.
"The U.S. only sells China approximately 100 Billion Dollars of goods & products, a very big imbalance," Trump said on Twitter. "With the over 100 Billion Dollars in Tariffs that we take in, we will buy... agricultural products from our Great Farmers, in larger amounts than China ever did, and ship it to po9or & starving countries in the form of humanitarian assistance."
U.S. markets are slumping after President Donald Trump tweeted that there is "absolutely no rush," on trade talks with China.
The Dow gave up 100 points in minutes and the S&P 500 and Nasdaq tracked those declines hours before the opening bell.
Markets have regained some losses but all three indexes remain in the red.
The Trump administration raised the import taxes on those goods from 10% to 25% at 12:01 Eastern time Friday. China threatened to retaliate.
President Donald Trump says trade talks between China and the U.S. are continuing in a "very congenial manner" despite new tariffs the U.S. imposed Friday on $200 billion in Chinese imports.
Trump tweeted Friday that the increased tariffs will bring in "FAR MORE wealth" to the United States, although a study by the Federal Reserve Bank of New York and Columbia and Princeton universities says the burden of Trump's tariffs falls on U.S. consumers and businesses that buy imports.
The study says the tariff money pads the federal treasury, but it's mostly -- if not entirely -- coming from U.S. businesses and consumers, not China.
Addressing concerns about the effect of the tariffs on farmers, Vice-President Mike Pence told Minnesota farmers this week that the administration is going to "look for ways" to help farmers affected by the trade dispute.
Trump suggested on Twitter Friday that the government could use money from the additional tariffs to buy more U.S. farm goods for shipment to "poor & starving" countries.
Talks between the U.S. and China are continuing Friday in Washington.
A Chinese Foreign Ministry spokesman says Beijing is hoping the Trump administration will meet China "halfway" in their dispute over trade.
The spokesman, Geng Shuang, spoke just hours after the U.S. raised tariffs Friday on $200 billion in imports from China to 25% from 10%. China said it would take unspecified countermeasures.
At a routine briefing in Beijing, Geng said that sound and stable relations were in the best interest of both countries and the international community.
He said, "We hope the U.S. and Chinese side can work together to jointly build a bilateral relationship of co-ordination, co-operation and stability. In this regard we hope that the U.S. will meet us halfway."
In Tokyo, Deputy Chief Cabinet Secretary Kotaro Nogami has told reporters that Japan hopes the U.S. and China will resolve their trade disputes through dialogue. He said an escalation of trade restrictions will not serve anyone's interest.
Japan's economy has taken a hit from lower Chinese exports to the U.S. Japan also faces pressure from President Donald Trump to scale back protections for its farmers and encourage more purchases of U.S.-brand vehicles.
Nogami said any trade measures should be in line with rules set by the World Trade Organization and Japan hopes "both the U.S. and China will work to constructively resolve their problems through dialogue."
China's government says it will take "necessary countermeasures" in response to President Donald Trump's latest tariff hike on Chinese imports but gave no details of possible retaliation.
The announcement followed an increase of U.S. duties on $200 billion of Chinese goods from 10% to 25%, escalating a fight over Beijing's technology ambitions and other trade strains.
A Chinese Commerce Ministry statement said, "China deeply regrets that it will have to take necessary countermeasures."
China responded to earlier U.S. tariff hikes by imposing penalties on $110 billion of American imports but is running out of goods for retaliation due to their lopsided trade balance.
Regulators have extended retaliation by targeting American companies in China. They have slowed customs clearing for shipments of their goods and stepped up regulatory scrutiny that can hamper operations.
President Donald Trump's increased tariffs on $200 billion in Chinese imports are taking effect, heightening tensions with Beijing.
At 12:01 a.m. Eastern time Friday, the Trump administration raised the import taxes on those goods from 10% to 25%. China threatened to retaliate if Trump proceeded with his threat to raise those tariffs.
The Trump team is intensifying its trade war with Beijing, which it claims reneged on commitments it had made in earlier trade talks. The tariff increase took effect even after negotiators for the two sides resumed talks Thursday in Washington.
The higher import taxes won't hit goods that already left Chinese ports before Friday's deadline. Only when those shipments complete the three- to four-week voyage across the Pacific to the U.S. would they face the 25% tariff.