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U.S. firms warn next China tariffs to cost Americans from cradle to grave

By David Shepardson and David Lawder
FILE PHOTO: Containers are seen at the Yangshan Deep Water Port in Shanghai, China April 24, 2018. REUTERS/Aly Song/File Photo

By David Shepardson and David Lawder

WASHINGTON (Reuters) - U.S. businesses have a message for the Trump administration: New tariffs on $200 billion (£156.42 billion) of Chinese imports will force Americans to pay more for items they use throughout their daily lives, from cradles to first bicycles and wedding dresses to coffins.

Six days of public hearings on the proposed duties of up to 25 percent started on Monday in Washington as part of President Donald Trump's and the U.S. Trade Representative's efforts to pressure Beijing for sweeping changes to its trade and economic policies.

Unlike previous rounds of U.S. tariffs, which sought to shield consumers by targeting Chinese industrial machinery, electronic components and other intermediate goods, thousands of consumer products could be directly hit with higher tariffs by late September.

The $200 billion list targets Chinese seafood, furniture and lighting products, tires, chemicals, plastics, bicycles and car seats for babies. https://www.regulations.gov/document?D=USTR-2018-0026-0001

"We can't make wedding gowns and prom dresses in the United States. Nobody wants to do this work," said Stephen Lang, owner of Mon Cherie Bridals, a Trenton, New Jersey-based dress producer and importer. "I can't find people who will do hand-beading. If there were options to go outside of China, the entire world would."

Lang, who also chairs the American Bridal and Prom Industry Association, was one of several executives to testify on Monday that U.S. manufacturing capacity for their products is long gone, so tariffs would mean higher prices and lower sales, costing U.S. distribution and retail jobs.

"Most consumers cannot or would not pay 25 percent more for a ball cap. And if this increase in tariff takes effect, our business will stagnate or decline altogether," said James Day, vice president of '47 Brand LLC, a Brockton, Massachusetts-based sportswear firm.

Day said his company, which sells headwear mostly made in China with licensed pro and college sports team logos, has never had complaints about theft of intellectual property by its Chinese manufacturers.

"USTR’s proposed tariffs on an additional $200 billion of Chinese imports dramatically expands the harm to American consumers, workers, businesses, and the economy," the U.S. Chamber of Commerce said in written testimony for the hearing.

The top U.S. business lobbying group said the Trump administration lacks a "coherent strategy" to address China's theft of intellectual property and other harmful trade practices and called for "serious discussions" with Beijing.

Mid-level Trump administration officials and their Chinese counterparts are expected to meet later this week in Washington to discuss their trade dispute. But it is unclear whether the talks will have any effect on the implementation of U.S. tariffs and retaliation by China.

U.S.-China Business Council President Craig Allen, speaking to reporters in Beijing on Monday, said more tariffs could create "grave economic distortions," but that Trump had been very clear to China about the problems in the trade relationship between the world's two largest economies.

"They (Chinese officials) have been given these suggestions in writing. I think that they know very well what is being asked. And let the negotiations proceed," Allen said, calling for a "surge" in Chinese market opening.

Companies selling bicycles and components warned that 94 percent of the 18 million bikes sold in the United States annually would face dramatically higher tariffs, raising costs and reducing the use of helmets and other safety gear.

"We fear consumers could forego utilizing these products altogether, choosing to ignore safety laws, perhaps by not buying a bike light and getting hit by a car because a driver does not see them. Or not wearing a helmet and dying from an impact to their skull," said Jennifer Harned, president of helmet and accessories maker Bell Sports, a unit of Vista Outdoor Inc <VSTO.N>

In more than 1,400 written comments submitted to USTR, most businesses argued the tariffs will cause harm and higher costs for products ranging from Halloween costumes and Christmas lights to nuclear fuel inputs, while a small number praised them or asked that they be extended to other products.

Graco Children's Products Inc, a unit of Newell Brands Inc <NWL.N>, said tariffs "will have a direct negative impact on our company, American parents and most importantly the safety of American children."

The company said higher prices may prompt more parents to buy car seats, swings and portable play yards on the secondhand market.

"The proposed tariffs may force parents to use unsafe sleeping environments or let children dangerously co-sleep with parents," Graco wrote. The tariff "only causes a children safety issue; it will not convince China to change its policies."

At the other end of the life cycle, Centennial Casket Corp President Douglas Chen said his Plano, Texas-based company relies exclusively on Chinese-made caskets and the tariffs would cause "great loss" and raise costs for "grieving families purchasing caskets for their loved ones at one of the worst times of their life."

The Internet Association, representing companies including Facebook Inc <FB.O>, Amazon.com Inc <AMZN.O> and Alphabet Inc <GOOG.O>, said the tariffs "would cause disproportionate economic harm to American internet companies. The list includes products that impact how internet companies function."


(Reporting by David Shepardson and David Lawder; Additional reporting by Michael Martina in Beijing; Editing by Dan Grebler and Jonathan Oatis)