As Trump embraces more tariffs, U.S. business readies public fight

[September 12, 2018]  By Ginger Gibson

WASHINGTON (Reuters) - After months of waging a behind-the-scenes war against President Donald Trump's trade tariffs that have escalated far beyond what business groups once imagined, more than 60 U.S. industry groups are launching a coalition on Wednesday to take the fight public.

Emergence of the group, Americans for Free Trade, comes after Trump has warmed to the use of tariffs, implementing billions of dollars worth in an effort to use them as a threat to win concessions or in the belief they will create U.S. jobs.

"A lot of other interest groups thought they wouldn't go this long or go this deep, but the layering effect (of tariffs) has finally gotten everyone to say: 'Enough is enough,'" said Nicole Vasilaros, the top lobbyist for the National Marine Manufacturers Association, whose members are weighing laying off workers after seeing costs rise as much as 35 percent.

Trump has imposed 25 percent tariffs on $50 billion worth of Chinese goods, mostly industrial machinery and intermediate electronics parts such as semiconductors.

A pending $200 billion list would extend further into consumer goods, and the threat of an additional $267 billion would basically cover every Chinese export to the United States. China has threatened retaliation, which could include action against U.S. companies operating there.

Washington has demanded that Beijing better protect American intellectual property, cut its U.S. trade surplus, allow U.S. companies greater access to its markets and roll back its high-technology industrial subsidy programs.

The business coalition includes groups representing some of the nation's largest companies. Among them, the American Petroleum Institute, which represents the largest refiners like Exxon Mobil Corp <XOM.N> and Chevron Corp <CVX.N>, and the Retail Industry Leaders Association, which represents companies like Target Corp <TGT.N> and Autozone Inc <AZO.N>.

"There has been a lot of work that has been going on over the last eight months to try to persuade the president and the administration that tariffs are not going to work. Our view is that it's not too late," said Dean Garfield, chief executive of the Information Technology Industry Council, whose members include Microsoft Corp <MSFT.O>, Google owner Alphabet Inc <GOOGL.O> and Apple Inc <AAPL.O>.

While Trump threatened tariffs on the campaign trail and ended America's participation in the Trans Pacific Partnership, a large multinational trade pact, few observers took his threat seriously.

Trump has since demonstrated he is serious on tariffs, ramping up the attacks on China, threatening car import levies and pushing for a more pro-American North American Free Trade Agreement, even at the risk of killing the three-country pact.

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The coalition grew out of weekly meetings featuring industries organized by the National Retail Federation (NRF), whose members include Amazon.com <AMZN.O>, Macy's Inc <M.N> and Walmart Inc <WMT.N>.

President Donald Trump holds an Oval Office meeting on preparations for hurricane Florence at the White House in Washington, U.S., September 11, 2018. REUTERS/Leah Millis

"This is almost every sector of the American economy involved," said David French, the top lobbyist for the NRF.

The group will target Republican members of Congress in five states - Ohio, Pennsylvania, Illinois, Indiana and Tennessee. While not engaging in electioneering ahead of Nov. 6 elections where control of Congress is at stake, it will urge constituents to discuss the trade issue with lawmakers. The group plans to expand that effort to a dozen states by the end of the year.

Members of Congress have failed to slow Trump's protectionist march and few have been willing to speak publicly for fear of arousing the ire of Trump and the Republican base.

The coalition hopes to push Republican lawmakers to press Trump to abandon tariffs by convincing him that his trade policy could undo his tax and deregulation push.

"The sugar high of the lower taxes and the reduced rules that have fueled the stock market since the president was elected are in jeopardy," said Gary Shapiro, head of the Consumer Technology Association, whose members include IBM Corp <IBM.N> and Facebook Inc <FB.O> He warned that some of his members were considering layoffs.

Steve Pasierb, head of the Toy Association, whose members include Mattel Inc <MAT.O>, Hasbro Inc <HAS.O> and Barnes & Noble Inc <BKS.N> said members of Congress were slow to be persuaded they needed to be concerned.

"It's been this kind of slow build that got worse and worse and worse. I don't think anybody in D.C. saw this coming."

(Reporting by Ginger Gibson; Editing by Peter Cooney)

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