Growing pressure for adjustment of US tariffs emerges

While the current effects are dramatic by nature, there is a growing and modest “optimism” that some form of mitigating action is imminent, in the form of reduced tariff levels on US imports from China. This optimism is rooted in a steadily brewing concern from many sides within the US, ranging from Fortune 500 company CEOs to the first Republican concerned voices echoing.

On Monday 21 April US President Trump hosted a meeting at the White House with Chief Executives from three of the nation’s top retailers namely Walmart, Home Depot and Target addressing concerns on the impact of China tariffs, which worst case can lead to empty shelves across the US, and not least inflate consumer prices.

While the meeting was touted as constructive and informative, the underlying signal is clear: Some of the largest companies in the US have strong concerns about what will happen in the coming weeks and months from a US economic perspective.

Another noteworthy opposition against the recent tariff scheme came from the International Longshore and Warehouse Union (ILWU) which issued a warning that US tariffs will lead to massive job losses and higher prices for working-class Americans, stating that; 

“The International Longshore and Warehouse Union (ILWU) unequivocally condemns the recent tariffs that the Trump administration has imposed,” the union said in a statement. “Tariffs are taxes. These and other reckless, shortsighted policies have begun to devastate American workers, harm critical sectors of the economy, and line the pockets of the ultra-wealthy at the expense of hardworking families. The tariffs have also sown distrust among our allies and inflamed geopolitical tensions. 

These tariffs are nothing more than a direct attack on the working class and should be opposed outright” and further that “Hundreds of thousands of jobs are dependent on or connected to global trade. Constricted trade between the world’s two largest economies could lead to devastating job losses for workers employed in the global supply chain,” the union said. It pointed to a recent move by Ocean Network Express further delaying resumption of its PS5 trans-Pacific West Coast service scheduled for May, and said ““[i]ndirect effects of these tariffs, like rising fuel costs and increased costs of construction materials, have already led to layoffs as American businesses struggle to adapt”. [2]

During April, more than 1,400 demonstrations across the US also took place, with protesters voicing their anger and fears over the impact on the average US American. They denounced the impact on consumers and the financial impact on retirees, fearing for the value of their investments and life savings.Our assessment of some form of tariff softening being in the making, is rooted in factors such as China having taken a clear and firm stance in the trade war, consumer and investor confidence dropping significantly, protests from longstanding allies across the world, and major business corporations from within the US voicing major concerns about a looming recession.   

When and if a tariff softening happens, it also means that some form of “ketchup” effect is likely to occur, with shippers scrambling to ship from China to the US on very short notice.