Packets of raw soybeans are placed on a table at a U.S. soybean company’s booth at the international soybean exhibition in Shanghai, China, on April 12. With the threat of tariffs and counter-tariffs between Washington and Beijing looming, Chinese buyers are canceling orders for U.S. soybeans, a trend that could deal a blow to American farmers if it continues. At the same time, farmers in China are being encouraged to plant more soy, apparently to help make up for any shortfall from the United States. (AP Photo/Andy Wong, File)

Packets of raw soybeans are placed on a table at a U.S. soybean company’s booth at the international soybean exhibition in Shanghai, China, on April 12. With the threat of tariffs and counter-tariffs between Washington and Beijing looming, Chinese buyers are canceling orders for U.S. soybeans, a trend that could deal a blow to American farmers if it continues. At the same time, farmers in China are being encouraged to plant more soy, apparently to help make up for any shortfall from the United States. (AP Photo/Andy Wong, File)

US firms seek tariff relief as US and China try to mend rift

The prospect of an escalating trade war has rattled financial markets and alarmed many businesses.

By Paul Wiseman / Associated Press

WASHINGTON — Corporate America is seeking relief from President Donald Trump’s threatened tariffs on at least $50 billion in Chinese goods as negotiators seek to prevent a trade war between the world’s two biggest economies.

Best Buy wants televisions to be spared from the tariffs. Sanden International (USA) of Wylie, Texas, warns it will have to lay off 39 of its 431 workers if 25 percent tariffs take effect on the components it uses to make car air-conditioning compressors. SABIC, a petrochemical manufacturer, wants some building materials struck from the tariff list.

As the U.S. government began three days of hearings on the tariffs Tuesday, Chinese Vice Premier Liu He traveled to Washington to seek a resolution to the trade dispute. A similar high-level U.S. delegation made a trip to Beijing earlier this month and returned empty-handed.

Trump had raised hopes for the latest talks by striking a surprisingly conciliatory tone toward China, which he has long accused of predatory business practices that robbed American jobs and swelled Washington’s trade deficit with Beijing. Trump offered a lifeline to ZTE, a Chinese telecom company that is fighting for survival after being hit with sanctions this month by the U.S. Commerce Department

Trump tweeted Sunday that he was working with President Xi Jinping to put ZTE “back in business, fast” and save tens of thousands of Chinese jobs — a stance that drew an immediate outcry from many Republicans and Democrats alike.

Trump had campaigned for the presidency on a vow to strike a much tougher trade stance than his recent predecessors, who, he argued, had agreed to deals that gave an unfair advantage to America’s competitors. The president has pointed to the U.S. trade deficit ($566 billion last year) as a sign of economic weakness caused by disastrous agreements and abusive behavior by China and other countries.

He has proposed tariffs on $50 billion in Chinese imports to punish Beijing for forcing American companies to hand over technology in exchange for access to China’s vast market. China fired back by targeting $50 billion in American products, including soybeans and small aircraft, for potential retaliatory tariffs. Trump then ordered the U.S. trade representative to look for an additional $100 billion in Chinese goods to tax.

The prospect of an escalating trade war has rattled financial markets and alarmed many businesses. The American Chemistry Council has predicted that by driving up prices and killing sales, the tariffs would wipe out 24,000 jobs at the companies that make chemicals and the companies that use them.

Yet some trade analysts have suggested that Trump’s unexpected ZTE overture could give U.S. and Chinese negotiators something to work with. Commerce and ZTE last year settled charges that the Chinese company sold sensitive telecommunications equipment to Iran and North Korea in violation of U.S. sanctions. ZTE agreed to plead guilty and pay about $1 billion in fines.

Commerce last month accused ZTE of violating the agreement and blocked the company from importing American components for seven years. The department said ZTE had misled regulators: Instead of disciplining all employees involved in the sanctions violations, Commerce asserted, ZTE had paid some of them full bonuses and then lied about it.

The two countries are reportedly attempting a swap: Relief for ZTE in return for Beijing dropping plans to impose tariffs on U.S. farm products.

“The president is transaction-oriented,” said Christine McDaniel, senior research fellow at George Mason University’s Mercatus Center. “He and his team are working very hard to make a deal … That (ZTE) tweet maybe teed up the visit by Mr. Liu.”

William Perry of the Seattle law firm Harris Bricken, who runs the US China Trade War blog, said he thought the president has belatedly realized that a trade war would hurt some of his staunchest supporters — farmers in the American heartland who rely on exports. It might also hurt his Republican Party in the November congressional elections.

“He’s worried about the midterms and the impact of his trade policy on farmers,” Perry said.

Still, Trump’s ZTE tweet drew fire on Capitol Hill from some Democrats and Republicans.

Republican Sen. Marco Rubio of Florida called ZTE a threat to U.S. national security. Senate Minority Leader Chuck Schumer of New York lambasted Trump for going easy on a company that violated U.S. sanctions.

“He talks a big game on China,” Schumer said. “He promises to be tough, and yet this weekend on the toughest thing he did (harsh sanctions on ZTE), the thing that woke the Chinese up … the president backed off.”

.

Talk to us

More in Herald Business Journal

Funko warehouse in Everett. (Kevin Clark / The Herald)
Funko to close Everett warehouses, shift work to Arizona

The company headquarters are currently in downtown Everett, but distribution will move to a Phoenix suburb.

FILE - In this Monday, March 1, 2021 file photo, The first Alaska Airlines passenger flight on a Boeing 737-9 Max airplane takes off on a flight to San Diego from Seattle-Tacoma International Airport in Seattle. A Boeing pilot involved in testing the 737 Max jetliner was indicted Thursday, Oct. 14,2021 by a federal grand jury on charges of deceiving safety regulators who were evaluating the plane, which was later involved in two deadly crashes. (AP Photo/Ted S. Warren, File)
Alaska Airlines to add Boeing 737s to the Paine Field fleet

It’s a sign of the growing popularity of flying from Everett. So far, much smaller Embraer E175s have been the rule.

FILE - Washington Attorney General Bob Ferguson talks to reporters, Monday, Aug. 26, 2019, during a news conference in Seattle. In a 5-4 decision Thursday, Jan. 20, 2022, the Washington Supreme Court upheld an $18 million campaign finance penalty against the Consumer Brands Association, formerly known as the Grocery Manufacturers Association. Ferguson sued the group in 2013, alleging that it spent $11 million to oppose a ballot initiative without registering as a political committee or disclosing the source of the money. (AP Photo/Ted S. Warren)
Washington justices uphold $18M fine in GMO-labeling case

Big grocers funneled dark money into a campaign against genetically modified labels on food packaging.

Mara Wiltshire, left, celebrates her first place finish in Mario Cart against her son Miles Jenkins, 7, as Calvin Jenkins, 5, looking on Friday evening at their home in Everett, Washington on January 7, 2022.  (Kevin Clark / The Herald)
Child care’s heightened burden takes parents out of workforce

One Snohomish County mom said she couldn’t return to work “because I didn’t have child care and I wouldn’t be able to afford it.”

In this photo taken May 17, 2017, wine barrels are shown at a vineyard adjacent to the Walla Walla Vintners winery in Walla Walla, Wash. The remote southeastern Washington town of Walla Walla - which used to be best known for sweet onions and as home of the state penitentiary - has now reinvented itself into a center of premium wines and wine tourism. (AP Photo/Nicholas K. Geranios)
More sustainable Washington wines are on the way

Labels will indicate grape growers met guidelines in 9 areas, including water, pest and labor practices.

A sign bearing the corporate logo hangs in the window of a Starbucks open only to take-away customers in this photograph taken Monday, April 26, 2021, in southeast Denver.  Starbucks is no longer requiring its U.S. workers to be vaccinated against COVID-19, reversing a policy it announced earlier this month. The Seattle coffee giant says, Wednesday, Jan. 19, 2022,  it's responding to last week’s ruling by the U.S. Supreme Court.  (AP Photo/David Zalubowski)
Starbucks nixes vaccine mandate after Supreme Court ruling

The move reverses a policy the coffee company announced earlier this month.

Logo for news use featuring the municipality of Stanwood in Snohomish County, Washington. 220118
Regulators OK doubling of composting operation in Stanwood

Lenz Enterprises can now handle 150,000 tons a year. Residents worry odors will be a problem.

Christian Sayre
Everett bar owner arrested again on new sexual assault charges

Christian Sayre, longtime owner of The Anchor Pub, was charged Friday with 10 counts of felony sex offenses.

FILE - Bill Gates speaks during the Global Investment Summit at the Science Museum, London, Tuesday, Oct, 19, 2021. A small city in the top U.S. coal-mining state of Wyoming will be home to a Bill Gates-backed experimental nuclear power project near a coal-fired power plant that will soon close, officials announced Tuesday, Nov. 16, 2021. (Leon Neal/Pool Photo via AP, File)
Microsoft to review workplace harassment, including Bill Gates allegations

One engineer wrote in a letter that she had a sexual relationship with Gates over several years.

Snohomish roofing company fined another $425K for safety violations

Allways Roofing has had at least seven serious injuries on its job sites, according to the state.

ZeroAvia will collaborate with Alaska Air Group, the parent company of Alaska Airlines, to produce a hydrogen-electric powertrain capable of flying 76-seat regional De Havilland Q400 aircraft in excess of 500 nautical miles. (Alaska Airlines)
Hydrogen-powered aircraft company ZeroAvia coming to Everett

It adds to Snohomish County’s growing repertoire of firms focused on flight without petroleum.

Jack Ng, owner of China City, at his restaurant in Mill Creek on Tuesday, Jan. 4, 2022. (Olivia Vanni / The Herald)
Businesses and nonprofits plan to push through COVID in 2022

“You can’t just wait until the fog clears,” says one business owner. Here’s what he and others are planning.