President Trump’s threatened new tariffs on Christmas decorations from China won’t take effect until next yr—however that’s no comfort to Mac Harman, who has to do his 2020 holiday purchasing now.
Mr. Harman is chief executive of Balsam Brands of Redwood City, Calif., which sells synthetic Christmas trees made in China. One of many factories that he buys from has given him a Dec. 20 deadline to put orders for next yr.
That normally isn’t an issue, however Mr. Harman says he can’t estimate demand till he knows whether Mr. Trump is serious about imposing 15% tariffs on an array of consumer goods including Christmas decor, beginning at 12:01 a.m. Sunday.
“You never know what the next day or the next hour will deliver,” Mr. Harman stated of the U.S.-China trade war’s head-spinning turns. “We’ve been rising and creating jobs, but two months in the past we stopped hiring because we’ve to assume the tariffs are going into place and we’ll no longer be rising.”
Other corporations that import electronics, toys, apparel and other goods that might be subject to the new tariffs share the same predicament. Despite expectations that the tariffs will likely be delayed, nobody is certain of what the president will do.
“Everyone seems to be kind of living on the edge,” stated David French, the National Retail Federation’s senior vice president for government relations. “I don’t think anyone has a lot of clarity, even inside the administration, of what’s going to occur.”
Mr. Harman stated the lighted Christmas trees bought under his Balsam Hill brand are made only in China. The privately held firm expects $170 million in sales this yr, up from $160 million in 2018, he stated.
Since tariffs will pressure him to take either lower profit margins or fewer sales, Mr. Harman’s firm is holding off plans to add 50 people to its U.S. workforce of 130.
“We’ve been rising as a company significantly, so just being flat could be down,” he stated. “We’re going to have to lift prices, it’s going to cut demand.”
The Wall Street Journal has reported that the Trump administration is likely to delay the scheduled new tariffs while trade negotiations continue with China. However Mr. Harman says a delay would simply extend the uncertainty for his purchases for the 2020 season.
Mr. Trump has defended tariffs as a needed measure to drive China to end business practices that he says have cost American jobs. Already, the U.S. has imposed tariffs on $361 billion of Chinese goods, and the threatened new levies would add 15% tariffs on $156 billion more in Chinese imports. That would leave about $20 billion of imported goods, in 2018 terms, not subjected to such duties.
“People elected Donald Trump because they were bored with excuses,” White House spokesman Judd Deere stated. “President Trump is the first president to face up to China and send a transparent message that the USA will now not tolerate unfair trade practices.”
Mr. Harman, 43 years old, says he understands that point of view. Raised in Cleveland, he stated he noticed his family’s steel-wire manufacturing business suffer against Chinese imports. Living in Silicon Valley, the Stanford business graduate stated he has seen China steal intellectual property.
“I get it,” he said, sipping hot chocolate in a hotel cafe in Washington on a recent morning.
Still, Mr. Harman stated he has no various to Chinese suppliers. He pleaded his case before the Office of the U.S. Trade Representative in June, solely to learn in August that his trees have been placed on a listing of products to be tariffed this month.
The USTR has yet to announce a proper exclusion process for the December tariffs, however relief has been hard for many companies to win.
More than 1,700 corporations are still waiting for the USTR to rule on requests to exclude products from the $200 billion tranche of tariffs placed last yr on Chinese items. These tariffs began at 10% in September 2018 and rose to 25% this past May.
To date, the USTR has ruled on just 17% of the 31,000 exclusion requests below the $200 billion tranche. The vast majority of rulings—96%—had been denials, based on a Journal analysis of data posted on a public docket.
Mr. Harman in June was joined by executives at other Christmas-related companies, who portrayed the tariffs as a hit to their employees and consumers.
“Who wants to place a tax on Christmas?” testified Doug Lauer, CEO of Old World Christmas, which sells blown-glass ornaments made in China. “Increasing the cost of celebrating Christmas will simply hurt American families.”
In 2011, the Obama administration faced sharp rebukes over what critics called a “tax” on live Christmas trees. The 15-cent assessment was pushed by real tree farmers who were losing ground to synthetic sellers and the cash was for a advertising effort just like the “Got Milk?” campaign.
The assessment was put on hold but eventually implemented, and the campaign continues at this time. “It’s Christmas. Keep it real,” goes the slogan.