Female labors work in a cloth factory which exports to the European Union in Huaibei, Anhui province, East China. (Image Credits: Jie Zhao | Corbis News | Getty Images via CNBC)

US Companies are in dilemma due to Trump’s new tariffs

Faradita Prayusti
Politics & Economic
Economic
Jun 19, 2019
2087
The restrictions of China goods in the U.S. is causing a dilemma for the country’s industries, especially for switching the suppliers and rising costs in production. The U.S leader Donald Trump is going to impose the new import tariffs on Chinese products for 25 percent.

Regarding the issue, on Monday, a hearing was held in Washington attended by a wide range of U.S. firms. During the hearing, the companies said they have few options other than China as suppliers for clothing, electronics, and other industries.

Some witnesses said to a panel of officials from the U.S. Trade Representative’s office, the Commerce division, State Bureau and other federal agencies that the production costs will raise more than the 25 tariffs if the producers take sources from other countries.

Vietnam is one of the choices to replace China in industries, however, dozens of oral and written testimonies showed it is hard to switch the manufacture to Vietnam and other countries due to human resources and infrastructure matters.

The president of the American Apparel and Footwear Association Rick Helfelbein said the companies would withdraw their product from China if they would, however the firms unable to move right now.

The president of Regalo International LLC – baby products creator in Minnesota – Mark Flannery said only China manufacture metal baby gates, even Vietnam mostly use steels from China. By moving to Vietnam, the production costs were going to rise about 50 percent higher than current costs in China, she added.

The increasing of tariffs on tech products could decrease public demand for electronic goods and eventually endanger U.S. technology leadership according to Best Buy – vacuum cleaner producer- and Roku inc – iRobot and TV streaming device creator – who disagreed with the 25 percent.

The chief executive of fashion footwear and apparel marketer Kenneth Cole Productions, Marc Schneider, decided to reduce the quality of its footwear and marked up prices instead of moving its production from China.

The trade war between Washington and Beijing affects many sectors in industries. it is difficult to replace China since the country dominates global productions.

Previously, the US President said he intends to have a meeting with Chinese Leader Xi Jinping during the G20 Summit in Osaka, Japan on June 28 – 29. However, both of the leaders haven’t confirmed a meeting.

Source: http://www.the-japan-news.com/news/article/0005818439

US , China , Production , Business , Industries , Import , Tariffs