The White House has announced its list of retaliatory tariffs against China, and (as one who has worked on compiling such lists) I was disappointed.
The majority of the items are products used by U.S. manufacturers or consumed by the same during the manufacturing process (aka ‘intermediate goods’). In my experience, the best retaliation is the one that hurts the exporter but has little impact on U.S. consumers. It’s low-hanging fruit. Exhibit A: cosmetics from China.
My highly intelligent regular readers know that I love to check on the country-of-origin of products — candy canes at Christmas being a favorite of mine. By the way, those cheapo candy canes at the dollar stores? They come from China. But I digress.
Lately, I’ve been checking on how cosmetic products from China have been grabbing more and more shelf space in chain drugstores, supermarkets and makeup stores. Shelf space is a fungible good. Therefore, if a brand whose products are made in China captures shelf space, it usually means the previous brand is no longer being sold at that store.
The numbers say I’m right. According to the U.S. International Trade Commission’s data, in 2017, China exported $1 billion worth of cosmetics and (non-medical) face preparations to the United States
Amazingly, the United States imposes no import duty on these products. There’s zero duty on imports from anywhere (except North Korea and Cuba, of course).
Would the U.S. economy collapse if consumers could no longer buy cheap Chinese lipstick? Obviously not. Further, there are inexpensive cosmetic brands made in America that would benefit from not having to compete with Chinese brands.
One problem I foresee, however, involves U.S. firms that do not list the country-of-origin on their products. For example, Procter & Gamble’s Olay line of facial preparations never displays the name of the country where the product was made. Perhaps I’m paranoid, but I wouldn’t be surprised if the answer was China.
In my opinion, cosmetics and similar products should have country-of-origin labeling. What is absorbed into one’s skin is absorbed into the body. Where a product comes from matters to many consumers, as shown by the growth in popularity of products claiming to be ‘paraben-free’ and ‘not tested on animals,’ etc.
Further, I’ve noticed how cosmetic products made in America or the EU. often display this information prominently. Clearly, their manufacturers believe it makes a positive difference to the consumer.
Incidentally, France has the number-two position behind China at $830 million. But this is no surprise when you consider a tube of French lipstick will cost $50.
Moving on, in the category of deodorants, shaving crème and room deodorizers, Canada comes in first at $193 million in exports to America, but China’s right behind them at $187 million.
If you’re sitting down while you’re reading this, chances are you’re sitting on a Chinese-made chair.
Last year, the United States imported $10 billion in various types of seating from China, from high chairs for babies to fancy teak chairs and everything in between. As with cosmetics, there is zero duty on these imports. It’s no wonder why the furniture business (and its jobs) disappeared from North Carolina.
Likewise, there’s zero duty on dental, medical, veterinary and barber’s chairs. China exported $327 million of these chairs to America in 2017.
In the ‘miscellaneous furniture’ category (baby cribs, dining tables, metal and wooden office furniture, etc.), China shipped us $11.3 billion of these goods. They’re duty-free too.
At the risk of putting you to sleep, I must tell you how China’s topped the mattress and mattress-support furniture category at $3 billion in exports to the United States. While ‘mattress-support furniture’ is duty-free, mattresses are not, but that hasn’t kept China out of the top spot.
It’s a similar situation with lamps and lighting fixtures. These products have tariffs ranging from two to eight percent. None are duty-free. Nevertheless, America received $7.2 billion in Chinese exports in this category. And yes, China’s in the top spot too.
As the Trump Administration considers other items as potential tariff targets, I urge the White House to take a hard look at these products, with a particular emphasis on cosmetic and facial products. These are completely discretionary purchases (with the small exception of cosmetics providing full coverage for scars – something Chinese makeup doesn’t do, as far as I know. My scar coverage makeup was made in the EU).
As for the other Chinese products I discussed earlier — the free-trade camp says we live in a global market. If America can’t make up the difference for a lack of goods from China, then other countries will fill the gap.
Finally, if President Trump wants to know why other countries are running trade surpluses against the United States, then he should look at the staggering amount of products that enter our country duty-free. As I noted earlier, there is a direct line between our trade negotiators wiping out tariffs on furniture and the disappearance of the U.S. furniture industry.
Let the free-traders wring their hands. America deserves better. Going for the low-hanging fruit against China needs to be part of the solution.
Joanne Butler is a graduate of the Kennedy School at Harvard, was a professional staff member at the House Ways and Means Committee, and served in President George W. Bush’s administration.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.