Make no mistake the U.S. Chamber of Commerce is almost always a political ally of Republicans. However, the pro-business lobbying group took a very public stand on Monday against President Trump's tariffs. Trade works. Tariffs don't.
John Murphy, senior vice president at the Chamber of Commerce during a CNBC interview, reinforced the Chamber’s warnings that escalating retaliatory measures imposed in response to U.S. tariffs by China, the EU, Canada, and Mexico will raise prices, cost jobs, and threaten the U.S. economy.
President Trump believes that the U.S. economy is doing well – so well – that suffering some economic pain to “fix some of the worst and most unfair trade deals ever made by any country" is justified.
John Murphy addressed the President’s confidence in the U.S. economy’s ability to withstand the currently escalating trade war by saying …
“Well, the president's right that the economy's doing well; we've got strong growth, record low unemployment. Our concern is that these trade actions threaten to put all of that at risk. This week, we're calling it retaliation week because there's a wave of retaliatory tariffs imposed by other countries against $75 billion of U.S. exports. And it's all coming online at once. Canada acted on July 1; on July 5, we have Mexico acting; and China the next day. This is going to take some momentum out of the economy. It's going to be a direct hit to specific companies, specific ranchers, and farmers all across the country.”
Regarding the costs of tariffs to its 3 million members of the Chamber of Commerce Murphy said …
“We all read about the nail manufacturer in Missouri, locker manufacturers, keg manufacturers. You know, what's, I think, really heartbreaking is what it does to small- and medium-sized manufacturers in particular. They don't have options that sometimes larger companies can rejigger their supply chain. It's the smaller firms that suffer the most. And the impact – we see it, for every beneficiary, there are at least a dozen or two dozen companies on the other side of the equation that suffer.”
“I heard from an equipment manufacturer in the Midwest who said that the increased price of steel, which is up about 50 percent this year because of the tariffs, it's cost them twice as much as the benefit that they're getting from tax reform. I hear from small auto parts manufacturers that - they don't want to come out and say it publicly yet - but the hit that they're taking, they think they can hold on another 60 days or so until their cash flow just gives out and they have to start laying people off.”
Chinese retaliatory tariffs went into effect at midnight.