President Donald Trump appears to be pressing top officials in his administration to develop a plan to impose trade tariffs on China – a move that, if enacted, could have implications for the promotional products industry. In a recent meeting, Trump reportedly told aides: “I want tariffs. Bring me some tariffs.”
According to media reports, Trump discussed his desire for tariffs in an Oval Office session with leading aides that included Chief of Staff Gen. John Kelly, National Economic Council Director Gary Cohn, U.S. Trade Representative Robert Lighthizer, and others.
In a report, Axios said that Trump and his team of administrators convened regarding a memorandum that would enable Lighthizer to determine whether or not to conduct an investigation into alleged Chinese trade abuses that center on the theft of American intellectual property and technology. Should the investigation find that China is indeed compromising U.S. intellectual property, the president would have authority to retaliate.
While Trump signed the memorandum, it appears trade tariffs were more front and center in the president’s mind. In a discussion reported by Axios, Trump reportedly told Kelly: “John, you haven’t been in a trade discussion before, so I want to share with you my views. For the last six months, this same group of geniuses comes in here all the time and I tell them, ‘Tariffs. I want tariffs.’ And what do they do? They bring me IP.”
Saying that China is “laughing at us,” Trump further reportedly said to Kelly: “John, let me tell you why they didn’t bring me any tariffs. I know there are some people in the room right now that are upset. I know there are some globalists in the room right now. And they don’t want them, John, they don’t want the tariffs. But I’m telling you, I want tariffs.”
The “globalist” remark was likely a reference to Cohn, who has opposed tariffs and advised the president to proceed cautiously so as not to disrupt trade. Nonetheless, it would seem Trump is intent on taking a hard line on tariffs as part of a broader effort to close the U.S. trade deficit with China and get tough on alleged Chinese trade abuses.
Depending on the form they take, potential tariffs on imported Chinese goods have the potential to raise the price of promotional products sold in North America, as the vast majority of items available here continue to be produced abroad, particularly in China.
In a joint letter to industry distributors sent earlier this year decrying plans for the “border adjustment tax” that was then under federal discussion, the promo industry’s two largest suppliers, alphabroder (asi/34063) and SanMar (asi/84863), said tariffs would “disrupt global business, cause job losses at American companies relying on imports and lead to significant increases in prices on a wide variety of consumer goods, including the products your business relies on.” Furthermore, alphabroder and SanMar made the point that import taxes would disproportionately affect industries that rely on imports.