WASHINGTON—Already roiled by the Trump administration's proposal for 10 percent tariffs on some $200 billion worth of goods imported from China, the rubber and auto industries and other business interests were horrified by the news that the White House wants to increase those tariffs to 25 percent.
The administration proposed the tariffs under Section 301 of the Trade Act of 1974, which gives the president authority to impose sanctions on foreign governments that violate trade agreements or engage in unfair trade practices.
The proposal covers a massive array of goods including virtually every kind of tire imported from China, as well as natural and synthetic rubbers, tubes, pipes, belts, gaskets, floor coverings, seals, washers, gloves and rubber chemicals. The total list of goods ran to 205 typed pages when the Office of the U.S. Trade Representative released it July 10.
In an Aug. 1 statement, U.S. Trade Representative Robert Lighthizer said President Trump had instructed him to consider increasing the level of the Section 301 duties from 10 to 25 percent.
"The Trump administration continues to urge China to stop its unfair practices, open its market and engage in true market competition," Lighthizer said in his statement.
"We have been very clear about the specific changes China should undertake," he said. "Regrettably, instead of changing its harmful behavior, China has illegally retaliated against U.S. farmers, ranchers and businesses.
"The increase in the possible rate of the additional duty is intended to provide the administration with additional options to encourage China to change its harmful policies and behavior," Lighthizer said.
However, business associations were quick to say that the proposed tariffs would do at least as much harm to U.S. interests as to China.
The Motor & Equipment Manufacturers Association, a vociferous opponent of the tariffs, issued an Aug. 1 press release quoting Michael Robinet, IHS Markit managing director, as saying the proposed tariffs would cause great harm to the U.S. auto industry.
"It's a tremendous impact and a substantial drag on our industry from a volume perspective," Robinet said in a July 31 speech.
The tariffs could cut light vehicle production in the U.S. by 1.4 million to 2 million units and increase prices per vehicle by anywhere from $1,800 to $5,800, Robinet said.
The National Retail Federation, another opponent of the tariffs, expressed renewed outrage.
"This round of tariffs amounted to doubling down on the recklessness of imposing trade policy that will hurt U.S. families and workers more than they will hurt China," said Matthew Shay, NRF president and CEO. "Increasing the size of the tariffs is merely increasing the harm that will be done. Tariffs are an unacceptable gamble with the U.S. economy, and the stakes continue to rise with no end in sight."
The Section 301 tariffs are over and above the tariffs on imported steel and aluminum the Trump administration proposed in mid-March, and also over and above the administration's proposed tariffs on autos, tires and auto parts under Section 232 of the Trade Expansion Act.