With his customs threats, US President Trump wants to force other countries to complete deals with the USA. What does this policy mean for US companies?
Rick Woldenberg is the head of hand2mind. The company based near Chicago sells educational toys, especially at schools in the USA. The self -developed toy has Woldenberg mainly manufactured in Chinese factories.
He is still stunned by the tariffs imposed by US President Donald Trump against China: “It is absolutely shocking that our own government does it,” says Woldenberg. “The problem is simple: the tariffs act like a tax increase.” This is particularly true by the small companies, Woldenberg told MSNBC to the television station last week.
In the meantime, the tariffs between the USA and China had rocked up to more than 100 percent. Now they are for Chinese toys and others were 30 percent as long as negotiations on a deal with China were running.
“The government doesn’t care what happens to us”
That is a little better, says the American family entrepreneur. But still poison for his business. “I think the government doesn’t matter what happens to us,” says Woldenberg. “You want to bring more car factories to the USA with the tariffs. Helping children with learning is obviously less valuable.” They would have created 500 jobs and invested in new technology.
Trump’s customs policy is still large in other US industry. The letters that the White House have now sent to trading partners will not change that either.
Clear words to trading partners
The sound in the letters signed by the president is binding, but hard on the matter: “Please understand that these tariffs are necessary to correct the trade policy of your country that causes an unsustainable trade deficit of the United States. This deficit is a threat to our economy and, yes, also for our national security!”
And because the United States is disadvantaged, Trump announced a unit custom to all products that sells the respective country to the United States.
Personal dunning letters from the President
The President has published more than a dozen dunning letters on his Network Truth Social. Words up to the customs height – between 25 percent – for example for Japan and South Korea – and 40 percent for Myanmar and Laos.
But that is obviously not the last word. In the letter to the state and government heads of the federal states, it also says: “If you want to open your previously closed markets for the United States and to eliminate your trade barriers, we will think about making a change in the customs height announced in this letter.”
That could mean a lot of detailed work. In the White House press conference, Trump spokeswoman Caroline Leavitt said that the president wanted to agree to a tailor-made trade contract with every country in the world.
Trump’s Minister of Commerce Scott Bessent has now fully dealt with all his hands because his mailbox overflows with new proposals from the trading partners, he said to CNBC.
Trade agreement can take years
So far, however, the United States has only agreed with a few countries. Trump announced a deal with Vietnam last week, and Great Britain had a trade contract in early May.
But a comprehensive trade agreement has not yet jumped out in the customs policy of the US President. Negotiations for such agreements usually last months and years, the contract texts are often hundreds of pages long. As a new date for the entry into force of the tariffs, the United States has now announced August 1st. After all, this creates air for negotiations – even with the European Union.
“We are just going through a pandemic 2.0”
Company boss Woldenberg, together with other companies, has sued Trump’s customs policy. At the end of May, he had initially received the right to a federal court. Another court had decided shortly afterwards that the president can continue with his tariffs for the time being.
In the TV interview, the toy manufacturer does not want to complain too much. “We do everything we can to get our business,” he says. “And we will do it too. We are just going through a pandemic 2.0 – and it’s even harder.” But the Covid pandemic survived its company. And Trump’s customs policy will also pass.
