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Business Sectors Evaluating Effect of Tariff War

09/27/2018

Both the high-tech manufacturing sector and retail are assessing the potential impact of the succession of announcements placing tariffs on imports from China.

The latest to sound an alarm is Walmart, the world’s largest retailer. In a letter addressed to U.S. Trade Representative Robert Lighthizer, Walmart confirmed that the most recently announced tariffs will raise prices to consumers representing an indirect tax.

The letter stated “As the largest retailer in the United States and a major buyer of U.S. manufactured goods (this is somewhat cynical as the company has always relied heavily on China, despite “Buy America” campaigns and in store images), we are very concerned about the impacts these tariffs would have on our business, our customers, our suppliers and the U.S. economy as a whole.”

The fact that the letter was addressed to Lighthizer over two weeks ago and in the interim the Administration has announced increased tariffs suggests that political considerations are outweighing prudence and judgement.

In the conflict with China, the Administration has apparently not taken into account the implacability of our trade adversary and the damage to our economy.

Walmart is not simply a commercial entity in Arkansas running a chain of big-box stores. Virtually every U.S. worker has either a direct or an indirect investment through 401k programs, pension funds and ownership of shares. Engaging in an escalating war with the World’s second largest economy and subject to strong central-government control, is subject to the Law of Unintended Consequences”.