As U.S. equipment dealers face price hikes, AEM blasts Trump plan for new round of tariffs on Chinese goods

Updated Jul 18, 2018

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With North American dealers braced for tariff-related price hikes from some heavy equipment manufacturers, an industry leader is blasting President Donald Trump’s plan to escalate the trade war with a new round of $200 billion on tariffs on Chinese goods.

“Nobody wins in a global trade war,” says Dennis Slater, president of the Association of Equipment Manufacturers (AEM)

“American workers, farmers, consumers, and the U.S. economy lose. Not only will these tariffs threaten many of the 1.3 million jobs our industry supports, they also hurt farmers who are already reeling from low commodity prices.

Dennis Slater, AEM presidentDennis Slater, AEM president

“On top of this, these tariffs are eliminating many of the economic gains created by last year’s tax reform. Tariffs are taxes on consumers and businesses. We need policies that encourage manufacturing in the United States. Not the opposite.”

The U.S. tariffs include 25 percent on imported steel and 10 percent on aluminum.

Some U.S. manufacturers even began raising prices before the tariffs took effect, dealers say.

Chinese officials are saying that the White House has begun “the biggest trade war in economic history,” and China has responded with its own tariffs.

“As the two largest economies in the world, cooperation is the only correct choice for China and the US,” China’s Ministry of Commerce says on its website. “The two parties should solve each other’s concerns through dialogues and realize common development, so as to avoid bigger harms to the overall situation of China-US cooperation caused by the follow-up actions.”

China is the world’s largest manufacturing country of construction equipment. Chinese construction equipment includes 20 categories of products, including equipment for excavating, earthmoving and lifting.

Chinese brands include XCMG, Zoomlion, Sany, LiuGong, XGMA, Shantui, SDLG, Yongmao, NFLG, Sunward and SinoMach.

On July 6, U.S. Customs and Border Protection started to collect duties on $34 billion worth of goods.

China retaliated by imposing $34 billion of tariffs on U.S. goods, including agricultural commodities. This comes when the agricultural equipment sector “has already been hit hard by a continuing slump in farm income,” Slater says.

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In addition, AEM says, another $16 billion worth of tariffs proposed by the Trump administration on Chinese goods is already undergoing further review in a public notice and comment process, including a public hearing.

“Combining the newly proposed $200 billion in additional tariffs on Chinese goods with the $50 billion already in place or threatened by the Trump administration, the total makes up for about half of the dollar amount in goods imported to the U.S. from China just last year,” Slater says.