Take it easy on China tariffs, Trump urged

American companies from Walmart to Amazon.com are warning President Donald Trump that any sweeping trade action against China could raise consumer prices, increase costs for businesses and hurt stock prices.

Broad-based tariffs on Chinese goods would “trigger a chain reaction of negative consequences for the US economy,” a coalition of more than 40 business groups, led by the Information Technology Industry Council, said this week in a letter to the President.

The US Trade Representative, Robert Lighthizer, is leading an investigation into China’s treatment of American intellectual property, and is expected soon to hand over its recommendations to address any unfair practices to Trump. The Administration is said to be considering wideranging tariffs on everything from consumer electronics to shoes and clothing made in China, say people familiar with the matter.

Tariffs on electronics, clothing and other products would raise prices for consumers and businesses, negating gains from the tax cuts passed by Congress late last year, the business coalition said.

Such measures could also hurt US companies that sell components of products exported from China, as well as raising input costs for American manufacturers, the group said.

“The Administration is right to focus on the negative economic impact of China’s industrial policies and unfair trade practices, but the US Chamber would strongly disagree with a decision to impose sweeping tariffs,” said US Chamber of Commerce chief executive Thomas Donohue.

Slapping tariffs on imports of information and communications technology products from China would reduce US investment in innovation and lower productivity growth, according to a report by the Information Technology and Innovation Foundation (ITIF).

“I’m glad they think it’s a big problem, because we’ve been saying this for years,” Robert Atkinson, president of the ITIF, said of China’s alleged disregard for US intellectual property.

“With the tariff approach, I worry that the Chinese could effectively retaliate, for example by going after some key US exports to China, like aviation.”