Romer: Potential trade wars can harm local businesses
The Office of the United States Trade Representative on May 13 released a list of $300 billion of Chinese imports that it is proposing to be subject to 25 percent duties. The announcement follows a May 5 statement by President Trump that all remaining imports from China not already covered by Section 301 would soon be subject to additional duties.
The additional products listed in the announcement effectively cover most of the remaining U.S. imports from China. The fourth list of Chinese imports for Section 301 tariffs could have far-reaching implications for our Eagle County business community, as the list includes a 25% tariff on recreational equipment (including but not limited to: skis, boots, bindings, accessories, bike parts, etc.), textiles, apparel, footwear, food products and artwork, to name a few.
In a case of “all politics are local,” this is likely to have an impact on our retail community. The tariff hike could be implemented any time after July 2, in any amount up to 25 percent, on top of the regular rate of duty.
This could impact Colorado outdoor recreation and retail companies to the tune of $1.5 billion — per month — according to the Denver Business Journal.
Colorado depends on world markets. Exports from Colorado helped contribute to the $2.33 trillion of U.S. goods and service exports in 2017. Exports support jobs. Nationally, U.S. jobs supported by exports reached an estimated 10.7 million in 2016, up 1.2 million from 2006. Exports sustain thousands of Colorado businesses. A total of 5,747 companies exported from Colorado locations in 2015.
The escalating tit-for-tat trade war and its threat to the American economy and our retail sector in Eagle County is concerning. We cannot afford this risk, as tariffs put the burden squarely on the backs of American consumers and businesses. Tariffs are increasing the cost of commonly-used products and materials and at the same time undermining the competitiveness of U.S. companies.
Tariffs imposed by the United States are nothing more than a tax increase on American consumers and businesses, including manufacturers, farmers, and technology companies, who will be forced to pay more for commonly-used products and materials. Retaliatory tariffs imposed by the European Union and China on U.S. exports will make American-made goods more expensive, resulting in lost sales and ultimately lost jobs here at home. This is the wrong approach, and it threatens to derail our recent economic resurgence.
America’s small business owners generate two-thirds all new U.S. jobs. However, in the trade debate it is often overlooked that 98% of the 300,000 American companies that export are small and medium-sized businesses. Trade continues to be the engine that drives many small businesses. The number of small and mid-sized firms that export has risen about threefold over the past two decades, and today they account for one-third of U.S. merchandise exports, according to the U.S. Department of Commerce.
Simply put, tariffs are a tax on American consumers and businesses. Tariffs are the wrong approach to address unfair trade practices and the new tariffs negatively impact Eagle County businesses, customers, and visitors.
Please reach out to our elected officials encouraging them to continue to oppose trade tariffs. It’s a national issue with local impacts and one that punishes American customers and local businesses.
Chris Romer is president and CEO of the Vail Valley Partnership, the regional chamber of commerce. Learn more at http://www.vailvalleypartnership.com.