Supply chain: Forced pressure on Biden to raise Trump tax as tensions increase

Mr. Trump imposes taxes on $ 300 billion of China’s manufactured goods – and despite changes in governance, jobs remain. U.S. exporters have paid more than $ 190 billion to pay these taxes so far, and many of them are now facing higher transportation costs.

While the Biden administration has been conducting a comprehensive review of the US-China political business, it has said little about resuming trade talks or promoting sanctions.

Now the pressure on Biden management to address the issue is growing, as retail problems continue to rise – resulting in shortages and high prices for everything from tanks to furniture to cars.

“Paying taxes is a quick and foolish way to help companies get seriously injured by the burden of staying in business and keeping people working,” said Steve Lamar, president and CEO of the American Association of Apparel and Footwear.

The union sent a letter to the U.S. office. Trade Representative last week urging the government to give them tax breaks. This was followed by a similar request from the four major manufacturing agencies, acknowledging that trade deficits need to be addressed over a long period of time, but said tax exemptions could provide relief there.

The trade deficit, which is compounded by trade deficits created by activities that “are undermining the competitiveness of US manufacturers and stabilizing the US economy,” the teams wrote.

Taxes are in place forever

Better yet, U.S. retailers they are urging the Biden administration to reinstate the exemptions some of them have received since 2018. When jobs were first created, companies could apply for waivers that were often offered items that could not be purchased from a US manufacturer. or anything other than China.

Some of the exceptions have been increased, such as those for self-defense equipment which is in high demand due to the epidemic, but many others have expired.

Currently there are taxes on most of the goods being shipped from China to the United States, including items such as baseball caps, luggage, bicycles, TVs, sneakers and various other items used by American manufacturers. The average rate is 19% – more than six times higher than the trade war before 2018, according to the Peterson Institute for International Economics. Buyers pay the taxes and usually pass on one or more of the prices to consumers.
Mr Trump used the tax as a payroll, which meant damaging China’s economy and forcing Beijing to agree to a new trade agreement that negatively regulates trade practices, such as smuggling and forced technology. He and Chinese President Xi Jinping reached a so-called Phase One agreement in early 2020. Some of these issues have been resolved, but issues such as businesses and state-owned enterprises have been left untouched. The agreement also reduced some of the taxes, but left them in the lurch.

There are no shelves and high prices

Marketing problems are hitting US companies at every step of the way. Increasing diversity in Delta and shortages of vaccines in other countries have led to the suspension of some foreign factories. There are back-to-back ports, such as the Los Angeles and Long Beach Ports where ships wait from the shore to do so. The shortage of US truck drivers is causing another congestion.

All of these cases are driving the shipping cost to companies, forcing them to pay shipping taxes that could be twice as much on a device than they did last year. The device is not only expensive but there are some extras if the seller is unable to bring the items out of the station quickly.

Large companies can find services, such as Costco, which has developed three cargo ships. Small companies are at risk of paying shipping costs which they cost on their payroll.
For retailers, fears are mounting that the crisis will boost the holiday shopping season this year. Most experts do not expect transportation problems to resolve in the months or even years to come.

But raising the tax can reduce some of the pressure.

“The obvious tax increase will not affect all lines in La Long Beach,” said Phil Levy, an economist at freight forwarding Flexport. “But what it would be like to make life easier for groups that have been very difficult lately.”


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