Tariff hikes will hit US consumers, experts say

The United States' latest move to raise tariffs on certain Chinese products threatens the stability of global supply chains and will ultimately pass the burden onto its consumers, market watchers and corporate executives said on Sunday.

The Office of the US Trade Representative announced on Friday that it has finalized tariff hikes on selected Chinese products following a four-year review aimed at "strengthening protections for strategic industries", despite opposition from multiple domestic sectors.

Business leaders and government officials said this will encounter industry opposition in the US, as finding substitutes for certain Chinese products in the short term will be challenging. Even if alternatives are found, they will come at a higher cost.

The US action not only severely disrupts international trade order but also fails to address the US' own trade deficit and industrial competitiveness issues.

These tariffs have raised the prices of imported goods in the US, and the costs will be ultimately borne by US businesses and consumers, said a spokesperson from China's Ministry of Commerce on Saturday.

The final revisions announced by the USTR under the Section 301 investigation into Chinese products not only maintained the tariffs on imports from China, including electric vehicles, lithium batteries, photovoltaic cells, steel and aluminum, semiconductors and port cranes, but also further increased the tariff rates on medical gloves, needles and syringes.

"We are also disappointed that the USTR did not meaningfully broaden its tariff exclusion process," said Craig Allen, president of the US-China Business Council, headquartered in Washington.

Allen said the tariffs make it harder for US companies to compete in the US and abroad, cost American jobs, increase consumer prices and invite Chinese retaliation.

A spokesperson from the Beijing-headquartered China Council for the Promotion of International Trade, said the US unilateral measures will severely undermine the confidence in long-term stable cooperation between relevant industries in China and the US, and negatively impact global industrial and supply chain cooperation.

Sharing similar views, Xu Deshun, a researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said that additional tariffs are protectionist activities, which is meant to hinder the development of China's emerging industries and products toward the mid-and high-end of the global value chains.

Stephan Buurma, a board member of Messe Frankfurt GmbH, Germany's largest trade fair and event organizer by sales revenue, underscored that as the growth of the global exhibition industry heavily relies on free trade and multilateralism, stable Sino-US and Sino-Europe economic and trade ties would benefit businesses on all sides.

"Despite external challenges, China remains a crucial market for global brands. Its vast consumer base, strategic importance in global supply chains and ongoing commitment to reform and innovation create significant opportunities," said Willie Tan, CEO of Skechers China, South Korea and Southeast Asia.

With over 3,500 stores in China, the US footwear brand plans to continue market expansion in the coming years.

To cope with impacts caused by geopolitical tensions and the rise of protectionism, Ulrik Knudsen, deputy secretary-general of the Organisation for Economic Co-operation and Development, called on countries to ensure a fair global playing field for trade by maintaining open markets and a well-functioning, rules-based international trading system.

The US remains China's third-largest trading partner, with bilateral trade value reaching 3.15 trillion yuan ($444 billion) in the first eight months of this year, up 4.4 percent year-on-year, accounting for 11 percent of China's total foreign trade value, according to statistics from the General Administration of Customs.

In another development, Chinese Minister of Commerce Wang Wentao met with Roberto Vavassori, president of the Italian Association of the Automotive Industry, in Turin, Italy on Saturday, the Commerce Ministry said in a statement.

The two sides exchanged views on topics including the European Union's anti-subsidy investigation into Chinese electric vehicles and China-Italy cooperation in the electric vehicle industry.