Is Trump losing his trade war with China? US sued over tariffs and faced with rising shipping costs

Wed 21 Oct 2020
Posted by: William Barns-Graham
Trade News

us china shipping

US businesses who trade with China are facing a double whammy of continuing tariffs and a hike in shipping costs, with several household names set to sue the White House for losses caused by the ongoing trade war.

Almost 3,500 firms – including Tesla, Ford and Home Depot – are filing litigation against the Trump administration over tariffs he has imposed on China, according to Reuters.

The suit claims that the escalation of the $300bn trade spat by the White House has been unlawful.

Trump’s tariffs

The Trump administration has said tariffs on Chinese goods were justified because China was stealing intellectual property and forcing US companies to transfer technology for access to China’s markets.

However, US firms are arguing that the latest escalation of tariffs is unrelated to these strategic concerns, with goods far more prosaic than high tech now among the imports affected.

Walgreen – one of the companies suing the White House – has complained that it is having to pay higher tariffs on products such as “seasonal novelties, party goods, first aid office supplies and household essentials”.

Shipping costs

The case comes as US companies also face a hike in shipping costs for imports from China as they seek to rebuild their depleted inventories ahead of the holiday season, the Financial Times reports.

Many cargo sailings were cancelled during the pandemic with firms now playing catch up on stock levels.

Prices from China to the US West coast are now 63% higher than in 2019, with routes to the east coast up by a quarter.

Biden bonus

The shipping issues underline US reliance on Chinese imports at a time when President Trump’s trade wars with China are causing growing concern in industry.

However, a win for Joe Biden in the presidential race could help to ease the tensions between the US and China, CNBC reports.

Biden has attacked Trump’s trade war with China, saying that tariffs have hurt American businesses and consumers. 

While analysts are not presuming that a Biden presidency will automatically spell a rapid reduction in tariffs on Chinese goods, they said: “Biden’s presidency could lead to a more rational approach to bilateral trade”.