CNN
By Katie Lobosco, CNN Business

New York (CNN)- American importers can ask for an exemption from President Donald Trump’s tariffs on steel and aluminum, and his first two rounds of tariffs on Chinese goods.

But they’re stuck paying duties if a product they import from China was included in Trump’s most recent round of tariffs imposed in September, which covered $200 billion worth of goods including food seasonings, hats, furniture, network routers and industrial machine parts.

The process to request an exemption has not yet been set up by the administration, nearly a month later, despite a new plea from 167 members of Congress.

“The lack of such a process for this most recent list is a glaring omission, particularly given its size in relation to the first two lists,” the bipartisan group of House members wrote in a letter sent to US Trade Representative Robert Lighthizer this week.

The US Trade Representative’s Office tells CNN that it has no announcement about opening up the exclusion process at this time. For the previous two rounds of tariffs on Chinese goods, USTR announced that they would establish an exclusion process at least a week before the tariffs took effect.

“It would be nice to have the ability to speak for our industry, to explain how we don’t have an easy option to switch production somewhere else,” said Tiffany Zarfas Williams, who owns the Luggage Shop of Lubbock with her husband in Texas.

Zarfas Williams estimates that 84% of the products currently in the store come from China, and most of them — including all backpacks, briefcases and luggage — have been hit with a 10% tariff.

She said that her biggest vendor has already raised prices, and that she’s had to pass that on to her customers.

Trump has repeatedly suggested that China pays the tariffs, saying they will bring “a lot of money” into US coffers. But tariffs imposed on foreign goods work by making those products more expensive, evening the playing field for similar items made domestically — and they’re paid for by American importers, putting those businesses at risk of seeing profits shrink or folding altogether.

“Some companies can absorb a 10% tariff, but for others a 10% increase would eat up their entire profit,” said Tom Gould, senior director of customs and international trade at Sandler, Travis & Rosenberg.

“They’re absolutely frustrated that this exclusion process isn’t in place,” he said.

Renegotiating trade practices has become a central tenet of Trump’s presidency. He pushed ahead with tariffs even at the cost of losing his top economic adviser Gary Cohn, who resigned in the wake of a fierce disagreement over tariffs on steel and aluminum.

Trump has argued that his tariffs have successfully pressured countries to negotiate. Earlier this month, he mocked politicians opposed to tariffs as “babies,” during remarks about the new trade deal with Canada and Mexico, which he said would not have happened without the tariffs.

But negotiations with China stalled after the latest round of tariffs went into effect.

His administration imposed a 25% tariff on $34 billion of Chinese goods in July and $16 billion of goods in August. The latest round of China tariffs started at a 10% rate and is set to increase to 25% at the end of the year.

On a call with reporters last month, a USTR official noted that the proposed list of goods for this round came out in July, giving businesses almost six months to prepare before the tariff would go to 25%.

The Trump administration wants to pressure China to stop engaging in what it calls unfair trading practices, but created the exclusion process to keep the duties from putting American businesses at a competitive disadvantage.

While the exclusion process is available to importers affected by the first two rounds of tariffs on Chinese goods, it has not been a quick process for businesses seeking relief.

None of the roughly 3,000 exclusion requests submitted to USTR to date have been granted. About 500 have been denied, according to USTR documents.

When evaluating a request, USTR considers whether the item is available only from China, whether the tariff would cause “severe economic harm” to the company, and whether the particular product is strategically important to China’s industrial programs.

An exclusion only offers relief for one year, but it could give a business time to find an alternate supplier. That process is likely to take several months, or longer if a new factory has to be set up outside China.

Some industries avoided the issue entirely after USTR removed nearly 300 items, including smartwatches, bike helmets, and highchairs, from the latest list following a public comment period held before they took effect.

Winners included Apple, which was spared after lobbying to remove some items. It narrowly missed having to pay duties on Apple Watches and Air Pods.

But Zarfas Williams doesn’t have the resources of a major company like Apple.

“I feel like we’ll be OK through Christmas. But if the tariff goes up to 25% on January 1, that will be a whole different story,” Zarfas Williams said.

Dallas Morning News
By Tom Benning, Washington Bureau

WASHINGTON — Texas companies paid $654 million more in tariffs in June through August than in the same three-month stretch the year prior, a 142 percent increase that comes as a direct consequence of President Donald Trump’s sprawling trade war.

That’s one of the major findings in an analysis released Thursday by the Tariffs Hurt the Heartland campaign, a national coalition of business and farm groups.

The startling jump in import levies jibes with the impact that’s been reported anecdotally by Texas businesses over the last several months as Trump has imposed tariffs on washing machines, solar panels, steel and aluminum, and an enormous list of goods produced in China.

Affected businesses may be forced to reduce investment and hiring as a result, while consumers could end up feeling the pinch by way of higher prices.

“This affects our bottom line,” said Texas Ale Project president Kat Thompson, explaining how the aluminum tariffs are hitting her company’s beer cans. “You may think, ‘OK, a one-cent increase on a can, whoop-de-doo.’ But it adds up real fast when you’re talking about 100,000 cans.”

Texas has been on the front lines of Trump’s trade war from the start, thanks to a trade-heavy economy that features strong ties to Mexico, Canada and other commercial hubs.

In addition to the duties Trump has put on goods coming into the U.S., Texas farmers, ranchers and other businesses have suffered due to retaliatory tariffs from countries across the globe that now cover billions of dollars in Lone Star State exports.

While Texas lawmakers in both parties have generally pushed back against Trump’s tariffs, the president has threatened to enact even more.

Trump has cited the levies as an effective way to gain leverage over America’s trading partners and get better deals for the U.S. He made that case, for instance, while touting the accord the U.S. reached late last month with Canada and Mexico on a new North American Free Trade Agreement.

“Without tariffs, we wouldn’t be talking about a deal,” he said then, referring to what he’s calling the U.S.-Mexico-Canada Agreement. “Just for those babies out there that keep talking about tariffs. That includes Congress.”

The Tariffs Hurt the Heartland campaign, as its name suggests, is unabashedly opposed to the import levies. But its new analysis, compiled by the Trade Partnership, was done using publicly available national and state-level trade data collected by the U.S. Census Bureau.

The findings reflect common sense: The amount of levies paid jumps when there are more tariffs.

It does take some time for the tariffs to really take hold, thanks to complex supply chains and the fact that Trump has imposed the duties in stages. But the data shows clear increases in tariffs paid starting in June, both in Texas and across the U.S.

Some of that bump can be explained by a simple increase in the value of imports, though tariffs tend to have ripple effects beyond just the goods they cover.

But even when isolating the data to just the products now subject to Trump’s tariffs, Texas companies paid $494 million more tariffs in June through August than in the same three-month stretch the year prior, the Tariffs Hurt the Heartland analysis found.

That amount is relatively small compared to the $263 billion in imports that Texas received last year overall. Trump administration officials have pledged that some short-term pain will lead to a long-term gain, pointing to renewed trade talks with Japan, the European Union and others as proof.

And some sectors have hailed the protectionist moves — with Trump pointing out that the steel industry, including in Texas, has announced additional hiring in the tariffs’ wake.

“One of things we’re most proud about is what’s happened with our steel industry. Our steel industry was dead. … It was dead as a doornail,” said Trump, who often adds that the health of America’s steel sector is a matter of national security. “Steel is through the roof now.”

President Donald Trump has defended his use of tariffs, touting the impact they’ve had on the steel industry: “Our steel industry was dead. … Steel is through the roof now.” (Olivier Douliery/TNS)

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But the tariff costs can add up in a meaningful way for a wide range of industries, since the levies cover everything from appliances to furniture to car parts to Christmas lights to coffins.

Texas’ oil and gas sector, for instance, has bemoaned the effect that the steel tariffs are having on pipeline construction and other activity. Texas’ semiconductor industry has said the levies on Chinese goods mean that they end up paying tariffs on their own products.

Some Texas businesses, particularly in the retail sector, rely heavily on imports.

“Unfortunately, the current tariff list impacts around 85 percent of the products we sell in our store,” Tiffany Williams, owner of the Luggage Shop in Lubbock, said Thursday at an event organized by Tariffs Hurt the Heartland at Texas Ale Project’s brewery in Dallas.

Texas farmers and ranchers, among others, are feeling the other side of that burn. Retaliatory tariffs imposed by China, Canada, Mexico and the EU make those Texans’ goods more expensive in foreign markets, with key exports like grain sorghum, pecans and cotton taking the hit.

While the Trump administration has launched a program to provide $12 billion in emergency aid to farmers and ranchers harmed by the trade war, the agricultural community remains concerned.

“Agriculture is bearing the brunt of these retaliations at a time when we can least afford it,” said Scott Frazier, a South Texas farmer and rancher who explained that he’s personally seen grain sorghum shipments from the Port of Corpus Christi to China plummet in recent months.

When and how all of this reaches consumers is an open question.

Some businesses may be able to eat the added costs. Others will not, and prices have already starting increasing on washing machines, refrigerators, outdoor grills and other items that include lots of steel or aluminum, according to government data and anecdotal reports.

But there is no doubt that the issue has the attention of Texas politicians, with trade emerging as a key issue in the high-profile Senate race between Sen. Ted Cruz and Rep. Beto O’Rourke.

While both candidates have expressed their displeasure with Trump’s tariffs, they’ve sparred over how best to handle the matter. Cruz, a Republican, has said that he, unlike O’Rourke, has a relationship with Trump and is able to push the president to reduce trade barriers.

“I have made the case repeatedly to President Trump that in trade we should be expanding our access to foreign markets,” he said Tuesday during a televised debate in San Antonio, citing Trump’s deal on a new NAFTA as a success.

O’Rourke, a Democrat, countered by accusing Cruz of being “all talk and no action.”

“If you have this special relationship with President Trump, then where is the result of that?” he said.