U.S. business group attacks Trump on tariffs,

U.S. Chamber sets out impact on each state

WASHINGTON • The U.S. Chamber of Commerce on Monday denounced President Donald Trump’s handling of global trade disputes, issuing a report that argued tariffs imposed by Washington and retaliation by its partners would boomerang badly on the American economy.

The Chamber, the nation’s largest business lobbying group and a traditional ally of Trump’s Republican Party, said the White House is risking a global trade war with its push to protect U.S. industry and workers with tariffs.

The chamber’s move came as Canada began imposing tariffs Sunday on US$12.6 billion in U.S. goods as retaliation for the Trump administration’s new taxes on steel and aluminum imported to the United States. The new Canadian tariffs, which took effect at 12:01 a.m. Sunday, are hitting a long list of U.S. consumer goods, including ketchup and other Kraft Heinz products.

As part of his combative America First approach, Trump has attacked the trade policies of the United States’ northern neighbour, citing Canada’s triple-digit tariffs on dairy products, which account for only about 0.1 per cent of U.S.-Canada trade. The U.S., in fact, last year enjoyed a US$2.8 billion overall trade surplus with Canada.

Meanwhile, Mexico’s president-elect Andres Manuel Lopez Obrador said Monday he supports reaching a deal to renegotiate the North American Free Trade Agreement with the U.S. and Canada. Those talks have been stalled over the Trump administration’s demands for higher U.S. content and a “sunset clause” in the 1994 trade agreement.

Lopez Obrador told the Televisa network Monday that he will respect the current team of negotiators, and let them continue representing Mexico until he takes office Dec. 1.

Trump has also tried to pressure Canada and Mexico into agreeing to rewrite the 24-year-old trade agreement to shift more auto production and investment to the United States. But that effort has stalled, and Trump said Sunday that he didn’t expect a deal that he could support until after the U.S. midterm elections in November.

The U.S. Chamber based its state-by-state analysis on data from the U.S. Department of Commerce and government agencies in China, the EU, Mexico, and Canada. The report finds, for example, that US$3.9 billion worth of exports from Texas could be targeted by retaliatory tariffs, including US$1.6 billion from Mexico and US$1.4 billion from China. Texas sends US$321 million in meat exports to Mexico each year that could be affected. It exports US$494 million in grain sorghum to China.

The Chamber also is expected to spend millions of dollars on the midterm elections this year in an effort to help elect like-minded candidates who back free trade, immigration and reduced taxes. It has already backed candidates in Republican primaries, who share those goals.

With some of America’s closest trading partners imposing retaliatory measures, Trump’s approach to tariffs has unsettled financial markets and strained relations between the White House and the Chamber.

“The administration is threatening to undermine the economic progress it worked so hard to achieve,” said Chamber President Tom Donohue in a statement to Reuters. “We should seek free and fair trade, but this is just not the way to do it.”

The White House did not respond to a request for comment responding to the Chamber.

The Chamber, which has 3 million members, historically has worked closely with Republican presidents and had praised Trump for signing corporate tax cuts in December. But mounting trade tensions have opened a rift with the president.

Trump has implemented billions of dollars in tariffs targeted at China, Canada, Mexico and the European Union, saying such moves are needed to offset trade imbalances.

Nations have begun retaliating. In addition to Canada’s move that took effect Sunday, China is expected to impose a new 25 per cent tax on soybeans in July. Mexico is adding duties to pork imports. The EU has targeted US$3.2 billion in American goods exported to the 28-member bloc, including bourbon and Harley Davidson motorcycles.

Trump has previously been persuaded to back off of trade threats with the argument that states that backed him in the 2016 presidential campaign will be hit hard.

Another example from the report showed how Tennessee, where Trump carried 61 per cent of the vote in the 2016 presidential election and has a competitive Senate race in November, could be affected with some US$1.4 billion in exports at risk.

Tennessee sends US$202 million worth of auto exports to China that could be hit by tariffs, the study found. It also sends US$466 million worth of whiskey exports to Europe.

The Chamber also highlights the impact in South Carolina, where US$3 billion of the state’s exports could be subject to retaliatory tariffs.