US Trade Czar Grilled By Congress As Trump Moves Forward With Triple-Digit China Tariffs
Despair and confusion overtook the U.S. stock market on Tuesday following the White House’s confirmation that President Donald Trump would make good on his threat to impose triple-digit tariffs on China-made goods.
While Wall Street saw a cautious rally in the morning hours, any hopes that the administration might reach positive outcomes in negotiations with trade partners in advance of the midnight deadline dissipated as the day progressed.
China, which hit back at the U.S. with retaliatory duties following Trump’s reciprocal tariffs announcement last week, will see an added duty burden of 50 percent beginning Wednesday, bringing its all in tariff total to a staggering 104 percent.
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As White House press secretary Karoline Leavitt delivered the verdict from the briefing room, U.S. Trade Representative (USTR) Ambassador Jamieson Greer faced probing questions from Senate lawmakers about the impacts the duties could have—and the effects they are already having—on people and industry.
Constituents, U.S.-based retailers and manufacturers are withering under the weight of the administration’s trade policies, they said. Several Republicans seemed incredulous. What is the administration’s plan, and how long can this go on?
For nearly three hours, lawmakers grilled Greer, whose responses, while measured, offered few new insights. And what he did reveal contributed to the consternation that many are already feeling.
Much confusion stems from the muddled messaging on the purpose of the tariffs—whether they are being used as points of leverage or bargaining chips, or whether the president’s dubious assertions about raking in billions in revenue for the federal government are the true objective.
“The President has indicated that he’s willing to negotiate with parties that want to pursue reciprocal trade with the United States,” Greer said from the hot seat, but he acknowledged, “We don’t have any particular timeline set on that.”
“The trade deficit has been decades in the making, and it’s not going to be solved overnight,” he added.
The response was unsatisfactory for Senator James Lankford (R-Ok.), who spoke on behalf of companies that shifted sourcing strategies during Trump’s first term in office. He pointed to an Oklahoma brand that spent “millions of dollars” retooling its supply chain to decrease dependence on China only to be hit now with staggering duties on the goods it imports from Vietnam.
“They spent all the money, spent all the time, shifted out of China, got to Vietnam and established there. Now they’re saying, ‘We’ve got giant costs in Vietnam at this point,’ so they’re going to have to renegotiate with every single retailer that they sell to,” including Walmart, Target and Costco, he said. Do they pause those talks or press on, not knowing what the coming days and weeks will hold?
Greer had no answer to the query, but reiterated oft-stated statistics about the size of Vietnam’s trade surplus with the U.S. While it’s true that Vietnam imports far less from the U.S. than it takes in (the trade imbalance rings in at $123.5 billion) Lankford said succinctly, “I don’t anticipate that we’re going to ever have equal trade with Vietnam. We’re much larger economy than they are.” Most countries in the world will simply never buy as much as we purchase, he added, illuminating the crux of the issue.
The Oklahoma senator also pointed to issues plaguing domestic apparel manufacturers. “Obviously, this is a challenge,” as they rely on “different pieces that are bought from different countries,” he said, referring to the inputs and materials that many U.S. cut-and-sew operators source from overseas. Will there be an exclusion process for the elements that make up a finished garment?
No, Greer said. “The president has been clear with me and with others that he does not intend to have exclusions and exemptions,” he said. “I’ve heard from textile manufacturers for many years that they would love to have a situation where Western Hemisphere textile and garment manufacturing is more competitive, and maybe we’re setting up the conditions for that.”
Senator Michael Bennet (D-Col.) called the USTR’s bluff, saying that the administration’s spray-and-pray tariff policy undermines nearshore friends and collaborators as well as offshore foes. “I still cannot fathom why we are treating Canada and Mexico, our largest trading partners, basically the same way we’re treating Beijing. It doesn’t make any sense to me; it makes no sense that we would do it all at the same time like that,” he said of the indiscriminate nature of the tariffs.
Speaking about small businesses in his home state, Senator Sheldon Whitehouse (D-R.I.) accused Greer of deflecting questions about immediate tariff impacts and reverting to the party line: “Short term pain for long term gain.”
That mentality won’t do for SMBs and mom-and-pops, which could be out of business before the dust settles on any forthcoming trade negotiations. “Rhode Island is a small business state,” and some of its manufacturers have an integral role to play in domestic supply chains, he said. But they need access to the imported inputs necessary to produce.
“If we’re not looking out for these small businesses that are actually going to have to lock their doors and close the shutters and fire their employees and go out of business, I think you’ve missed a huge hole in the problem that these tariffs have created,” he said. “If all you’re listening to is the big, mega-corporations who can move things around the world and have the resources to dodge these effects, you’re not getting the straight story.”
Greer said the administration has a trade advisory council made up chiefly of small business stakeholders. “If a small business has gone broke, it’s not very amenable to a meeting. They don’t exist any longer,” Whitehouse retorted.
Senator Raphael Warnock (D-Ga.) continued to push on the exclusion issue, pointing to a business in his home state—Bamblu, a maker of bamboo-based sleepwear and sheets, owned by local entrepreneur Angela Hawkins. “Angela’s products are made overseas, because you can’t really find bamboo fabric made in the United States. What should Angela do? Pay the new tax, raise her prices and risk losing customers? Or is there a process for her to apply for an exclusion from the Trump White House?” he asked.
“She’ll have to work with her business partners and find out about sourcing,” Greer said, reiterating that at this point, the White House has no intention of implementing an exclusion process as it did during Trump’s first term for Section 301 tariffs on China-made goods.
“So she’ll just have to figure it out,” Warnock surmised. “She might even go out of business.”
Greer may have hoped for an ally in Senator Chuck Grassley (R-Iowa), the longest-serving Republican in the upper chamber, but the Senate stalwart has recently made his feelings clear: the legislative branch has delegated too much power to the president on trade issues. Grassley last week introduced bipartisan legislation that would check the president’s authority when it comes to tariffs, reinforcing Congress’ ability to remove them at any point.
He did attempt to gain clarity on the foremost issue nagging at lawmakers, business-owners and the general public.
“My question to you is: in the medium- to the long-term, do you plan to turn these tariffs into trade deals to reduce tariffs and non-tariff barriers? I support that,” Grassley said. “On the other hand, if the purpose is to stall on negotiations in order to keep tariffs high for the sole purpose of feeding the U.S. Treasury, I oppose that. So is this administration for trade reciprocity, or for Treasury replenishment?”
Greer said the president still plans to engage in negotiations “immediately” with countries that are interested in lowering trade barriers and trade surpluses. But while the administration’s strategy has been far-reaching and wide-ranging, affecting more than 180 countries across the globe, resolutions will be reached on a “country by country” basis.
In short, it will take time that many U.S. businesses don’t have to waste. The USTR Ambassador said the trade agency has fielded calls from officials from 50 nations since announcing the reciprocal duties last week—and yet, all of the president’s proposed tariffs are slated to go into effect Wednesday.
“There are going to be some countries that are not able to address their non-tariff barriers or tariffs or the deficit fully, and there will be others who I think will be able to do that, and… the president will have the option of making a deal with them,” Greer said.
“We’re certainly seeking reciprocity,” he added, acknowledging that there will be a “revenue effect” for the federal government once tariff payments start rolling in. “But we need to reshore manufacturing, to get rid of our agricultural deficit and we need to make sure that if countries are going to trade with us, it has to be on a reciprocal basis.”
