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Roundup: American retailers distressed amid rising trade tensions with China

Source: Xinhua| 2019-08-27 18:49:55|Editor: xuxin
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By Julia Pierrepont III

LOS ANGELES, Aug. 26 (Xinhua) -- U.S. retailers expressed their distress Monday following Washington's move to order American firms to quit China and a threat to use the International Emergency Economic Powers Act (IEEPA) against China.

"There is no legal basis in American law for a U.S. president to force U.S. companies out of China," said Jesse Weiner, an L.A.-based attorney representing companies doing business between the United States and China. "It's a serious misuse of authority."

The IEEPA was signed into law by former U.S. President Jimmy Carter to use against terrorists and massive drug cartels, Weiner told Xinhua on Monday, adding it was never envisioned as a punitive measure to be used against one of America's major trading partners.

The administration's "erratic behavior" and "wild assertion" to force American businesses out of China "has markets seesawing with no stability in sight," said John B., a small business owner in the garment industry. "If you think that's good for business, think again."

John declined to give his last name for fear of government reprisals.

The U.S. government announced on Aug. 15 that it will impose additional tariffs of 10 percent on Chinese goods worth about 300 billion U.S. dollars, effective on Sept. 1 and Dec. 15, respectively, in two batches.

In response, Beijing announced its decision on Friday to impose additional tariffs on U.S. imports worth about 75 billion dollars. Washington then vowed to retaliate with further tariffs later in the day, fueling fears of economic consequences that would spin out of control.

"American retailers are already struggling. This will put the nail in their coffin. As tariffs go up, prices go up; as prices go up, sales go down; as sales go down, jobs are lost. What do you think that will do to our economy? That's the reality," Rick Helfenbein, president and CEO of the American Apparel & Footwear Association, told Xinhua on Monday.

"It's sheer insanity!" Helfenbein said, considering "the U.S. apparel and footwear industries already pay 51 percent of all duties collected in the United States" and "adding more duties on top of that" would simply be unbearable.

"The 75 percent tariffs on kid's backpacks are hitting the back-to-school market right now and that's already taking a heavy toll on retailers and consumers," he said. "Handbags and other accessories will be hit by the next tariff increase in six days."

These "ill-considered" tariffs, he said, were announced without taking into account that "China doesn't pay for tariffs, the American consumer does. That's Economics 101."

"Tariffs are nothing more than Trump's hidden tax on the very people who put him in office," Helfenbein said, comparing tariffs to "nuclear weapons" that will have "drastic and unpredictable consequences, not just on China's jobs and businesses, but on American jobs and businesses as well."

Adam Allen of Capsmith Incorporated, a company specializing in logoed baseball caps, agreed. "You can't just change the price in the middle of everything after contracts have been signed, so who's going to absorb the tariffs? In the end, it will be the consumer that all those price increases get passed on to," he said.

"We get a few products from places like Guatemala, but mostly we use factories in Shenzhen, Yangzhou of Jiangsu Province, and Qingdao, all in China. We've had good relationships there for decades," said Allen, whose company has been doing business in China for 30 years.

"China and the U.S. are so intertwined, it's not possible to hurt one without the other ... The retailers won't be making any money, because their profits are being ripped off by tariffs. It's not sustainable," Helfenbein said.

"We are in the lull before the storm. But Tranche Four Tariffs are coming into effect ... and when all the tariffs have taken full effect, we will all be feeling the pain and our economy will start to crater," the industrial leader warned.

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