The president of the Indiana Chamber of Commerce said Thursday that the Trump administration is "gambling with other people's money" in its escalating trade war with China.
Kevin Brinegar's comments reflect the increasing worry among Indiana business leaders about the impact the trade war between the United States and China could have on the state’s manufacturing and agriculture industries. The Indiana Chamber said those impacts could be devastating for the Hoosier business community.
Last week, President Donald Trump announced plans to increase tariffs from 10% to 25% on $200 billion worth of Chinese imports that include a wide variety of products like aluminum and steel, frozen fish and meat and wood. The complete list of products impacted by the tariff hike spans 196 pages.
According to CNBC, consumer goods account for about 25% of the items impacted.
On Monday, China retaliated with tariffs on $60 billion of U.S. goods, targeting peanuts, sugar, wheat, chicken and turkey.
“The president and the administration are effectively gambling with other people’s money,” said Kevin Brinegar, CEO of the Indiana Chamber of Commerce.
The tariffs, which are essentially a tax charged on goods imported to the U.S. or China, are typically paid by the company receiving the product. That means businesses that buy supplies from China could be subject to the 25% tariff, if the product is among the targeted items. The tariff is paid to the U.S. government.
The new trade barriers came as both nations days earlier had expected to sign a trade deal and end the ongoing battle.
Indiana exports about $2 billion in goods to China and imports about $9.2 billion in 2018, according to the U.S. Census Bureau.
“In the end, this is just a lot of uncertainty in a marketplace that values consistency and certainty,” said Andrew Berger, vice president of governmental affairs and tax policy for the Indiana Manufacturers Association.
Berger said the impact of the tariffs for individual businesses will depend on how much a manufacturer is importing from or exporting to China and which specific products are involved, but in general, companies are nervous about the escalating trade war.
Brinegar said businesses across the state that export to China are worried their customers will look for other suppliers to avoid the retaliatory tariffs.
“We’re hearing significant and deep concern about that from our members,” Brinegar said. “Once you lose a customer as a supplier, it’s really hard to get them back.”
Business leaders say they’d like to see a level playing field with China when it comes to trade and have long been concerned about unfair trade practices, especially related to intellectual property theft, and so they understand the administration's intent. But they said there's concern about how long companies can weather the negative impact and whether the strategy will work in the long run.
“That theft is estimated to cost the U.S. hundreds of billions of dollars each year, and it needs to stop," Brinegar said in a statement. "But there has got to be a better way than putting American businesses and jobs on the line. And we are communicating that to members of Indiana’s congressional delegation and the Trump administration.”
But it’s unclear what an effective or guaranteed solution would look like.
“There’s no question this is not an easy fix, and we acknowledge that,” Brinegar said.
“I don’t think anybody thinks this is the end of the story,” Berger said. “I don’t know what the result is going to be but I know there are a lot of people very nervous about the future of these issues.”