While reports this week point to the possibility of progress being made on the phase one trade deal between the United States and China in the ongoing tariff-centric trade war, that does not diminish the impact and increased costs that this situation has wrought to date. That sentiment was made clear in data issued this week by Tariffs Hurt the Heartland, a nationwide, bipartisan campaign focused on telling the stories of American families, businesses and workers who are hurt by tariffs.
Tariffs Hurt the Heartland officials said that this data is included within its monthly Tariff Tracker it rolled out in a partnership with The Trade Partnership, an organization that compiles monthly data issued by the U.S. government, with import data from the U.S. Census Bureau and export data from the U.S. Department of Agriculture.
According to data issued by the organization, American consumers and businesses have paid an additional $38 billion going back to February 2018, when the trade war began, through September 2019. And it added that this represents the first time data has been released on the tariff impact on $112 billion in goods, most of which are consumer-based, that took effect on September 1. What’s more, it added that Americans paid $905 million over the first 30 days of these tariffs taking effect.
Other key tariff-related data points cited by Tariffs Hurt the Heartland included:
Americans paid $7.1 billion in tariffs in September, which is higher than any other amount in U.S. history and up 59% annually and up $600 million over August;
this increase in tariffs is driven by tariffs implemented by the White House and represent $4.1 billion of September’s total;
Chinese tariffs on American exports are at $10.6 billion going back to the beginning of the trade war and were more than $1 billion for September, with a large emphasis on U.S. farm exports; and
U.S. exports to China that are subject to retaliatory tariffs are off almost 30% compared to pre-trade war levels
“This data offers concrete proof that tariffs are taxes paid by American businesses, farmers and consumers – not by China,” said Americans for Free Trade spokesperson Jonathan Gold in a statement. “This is why removing tariffs must be a part of the phase one deal. Unfortunately, while the trade negotiations are an encouraging sign, reports indicate the phase one deal being discussed does not address these tariffs that are already in place that have cost Americans $38 billion. Until all tariffs are removed, they will continue to do significant damage to American consumers, businesses and farmers.”
This data comes out at a time when it is fair to say that tariffs have had a significant impact on freight transportation volumes and inventory levels, in addition to import and export figures as well. That has been seen at different points over the past several months, with various signs of “pull forward” activity by U.S.-based companies, in order to get ahead of pending tariffs.
And it has clearly impacted manufacturing output as well, based on the last three months of manufacturing data issued by the Institute of Supply Management (ISM), which has seen notable declines for new orders, production, inventory, and supplier deliveries.
These factors have led to an extended period of slowing business conditions, driven in part by slowing business conditions and ongoing trade tension between the United States and China. And this is in tandem with lower demand across various manufacturing sectors, coupled with expectations of a slow fourth quarter of 2020 and first quarter of 2021.
“It is being used as a threat more and more often,” he said. “Using the economy as a threat to meet your political goals is a really dangerous place to be.”
And Chris Rogers, research director for global trade intelligence firm Panjiva explained that from a fundamental perspective, it comes as no surprise that the U.S.-China trade war is, and continues to represent, a major driver of trade activity.
“In September, we had the first round of the so called ‘List 4’ tariffs, and it is now a question of what is going to happen next, in terms of if all products are going to be covered or a stepping back in the trade war, which is in the hands of negotiators at the moment,” he said. “There are some countries doing well at the expense of China, with Vietnam being the most obvious one. That presents a partial offset for logistics services providers, in that they will need to rearrange some of their services while being cognizant of the fact that things are slowing down broadly…on a global level as it relates to exports. That makes it pretty clear that the trade war is not the only game in town, when it comes to things impacting global shipping activity.”
Looking ahead at the coming months, Rogers said the global trade environment is a complicated picture with lots of moving parts.
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