We cannot run business without China's supply, says US publishers amid trade war

File photo of US-China flag. Photograph:( Reuters )

Reuters Washington DC Jun 19, 2019, 10.31 AM (IST)

US business representatives who attended the new round of hearing on tariff increase on Monday opposed the additional tariffs, saying that they cannot do without China's supply and cannot afford another round of tariff rise.

Different from former tariff increases, which mainly targeted intermediate products and industrial products, the new round of tariff is on consumer goods that every American resident has to use, such as cellphones, laptops, clothes, shoes, toys, and gaming devices, with a total worth of US $300 billion.

However, statistics showed that 82 per cent of cellphones and 94 per cent of laptops in US market are manufactured or assembled by Chinese manufactures, and a US $277 billion worth of clothes come from China.

If the levies are imposed, American consumers will suffer a huge blow, and American companies will lose a huge amount of profits, with some perhaps having to lay off employees or even close.

Although the US Department of Commerce and the Office of the US Trade Representative constantly ask American companies to seek alternatives in other countries, the answer is almost the same.

Watch: US-China trade friction 'hurting world economic chain'

"It's not as simple to change a supply chain as to just send an email and say 'I would rather deal with you' or something. It takes many years to develop a relationship with suppliers. So for us, it's taken several years, almost decades now. It's cost a lot of money for us to visit China or have them visit us. And it's years of trust of doing business with each other," said Brandon Peckman, Sales Manager of Real Trading LLC.

The US publishing industry will probably suffer heavily from the tariff increase, as a US $2.3 billion worth of books on American market are printed and made in China.

"We don't have an option as to where we can go. Often it's because of the cost. A lot of the daily newspapers have gone out of business here in the States, so the printer capability, which I think you heard some testimony about, has gone down. So it's costs, also technology," said Jamie Fiocco, chairman of American Booksellers Association.

"One of the best examples might be children's book. And a lot of those titles are four-color titles. They're titles that use unique formats or maybe have especially interesting add-ons in terms of sidelines that come with those titles. And the US currently does not have that capacity or the technical skill to produce such titles. The US has a lot of very fine printers, but they tend to concentrate on one-color printing. Right now, it's coming from China," said Dan Cullen, Senior Strategy Officer of American Booksellers Association.

Over 500 American enterprises and industry associations attended the hearing on a further of US $300 billion worth of imported Chinese products at the International Trade Commission in Washington DC on Monday.