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US-China tariffs: The next round could hit your Fitbit, dishwasher, and garlic seasoning

American consumers may soon get a taste of the trade tensions between the United States and China.Tho...

Posted: Sep 13, 2018 8:14 AM
Updated: Sep 13, 2018 8:14 AM

American consumers may soon get a taste of the trade tensions between the United States and China.

Thousands of goods, ranging from dishwashers to Fitbit fitness trackers to food seasonings, are poised to become more expensive if President Donald Trump moves ahead with a new round of tariffs on $200 billion of Chinese goods.

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On Friday, he said they could go into effect "very soon" and warned more could come.

The Trump Administration is considering either a 10% or 25% tariff on the $200 billion in imports. But it has also invited Chinese officials to a new round of talks, top White House economic adviser Larry Kudlow said Wednesday.

If the new taxes do go into effect, the United States will have imposed tariffs on about half of all Chinese goods coming into the United States, or about $250 billion.

Beijing has imposed tariffs on $50 billion of US goods to date, and pledged to retaliate with tariffs on an additional $60 billion.

The Trump Administration wants to punish China for what it says are unfair trading practices, such as putting pressure on US companies to share technology with them in order to access the Chinese market. China has accused the United States of trade bullying.

The cost of the tariffs on Beijing could be passed along to American consumers. At least half of all the hats, mattresses, suitcases, and furniture in the United States is imported from China. They would all be taxed in the next round if the final list of goods looks like the one proposed. Tariffs would also be imposed on some more obscure items, like antiques that are more than 100 years old, bicycle speedometers, and door peepholes.

Many American companies say tariffs will hurt their business by increasing the cost of materials they need to make a product in the United States. They have to decide whether to pay the tariff on an imported good or find a new supplier outside China.

Over the past month, companies have asked the government to remove certain items from the proposed tariff list. Some of the requests include:

  • Whirlpool has said that parts it buys from China to make dishwashers in Ohio are on the list.

  • Apple said materials used to make chargers and adapters, as well as its Apple Watch and its wireless Air Pods would be hit.
  • Fitbit said a tariff on wearable fitness trackers and smart watches would impact most of its products made in China and sold in the United States.

  • McCormick said that tariffs on dried shallots and garlic will drive up the cost of its seasonings.
  • Dell, Cisco, Juniper Networks and Hewlett Packard Enterprise, are worried the tariffs will increase the costs of their networking equipment, leading to possible US job losses.
  • The Society of American Florists said that a 25% tariff on floral containers could eat into about half of a florist's profit.

  • The CEO of Jo-Ann Fabric and Craft Stores, Jill Soltau, said proposed tariffs on fabric, yarn and fleece would punish her company and her customers, instead of hurting China.
  • The maker of Camelbak hydration packs said the cost of stoppers, lids and caps for its water bottles would go up.

But some American companies welcome tariffs on specific items, especially finished products so that they are more expensive than the products made in the United States.

Whirlpool "applauds" the decision to include finished appliances, such as refrigerators and freezers, on the tariff list, it said in a letter to the US trade representative. It also asked that finished dishwashers be added to the list. In another example, seafood company Starkist wrote a letter in support of the proposed tariff on Chinese tuna.

Once the tariffs go into effect, businesses can submit an application requesting the government exclude a specific product from the tariff. They must show that the good is not produced anywhere else. But the process is arduous and creates a lot of uncertainty for businesses while they wait for a ruling, which could take months.

Companies have submitted more than 1,400 exclusion requests from tariffs put in place earlier this year on $50 billion of Chinese goods. They are all still under review.

But they can't request exclusions from the tariffs that Beijing has put on US goods. They've already been imposed on nearly 40% of US goods shipped to China and if another retaliatory round is added to $60 billion of goods, the levies will cover more than 80% of all US exports to China.

As Beijing runs out of goods to tax, it may consider other measures, such as delaying license applications American companies need to operate in China.

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