When President Trump announced last week that an additional 10 % invoice in Chinese goods will come into force on Tuesday, Logan Vanghele immediately called Logistics company operating a $ 120,000 aquarium mission for its small businesses.
The cargo was on a ship on the road to Boston from China. His message was clear: “Take this thing from the boat, please.”
Company executives and foreign officials are trying to prevent the consequences of another rigorous deadline by Mr Trump, who threatened to put hard invoices on goods from China, Canada and Mexico, starting shortly after midnight.
The president describes this as an attempt to push these countries to stop the flow of fatal drugs and immigrants to the United States. But Mr Trump’s game with America’s three largest trading partners creates intense uncertainty for business owners.
This includes Mr Vanghele, 28 years old, who manages a small company that sells lighting and equipment for aquariums, all manufactured in China. He had no idea that the mission – one of the largest so far – could face such remuneration when he left Yantian port to southeast China in January, just days before Mr Trump’s abandonment. In a frantic attempt to avoid paying about $ 25,000 in invoices, Mr Vanghele claimed Logistics last week to unload his container to a port to Norfolk, VA., Where he stopped on Friday, instead of traveling to Boston.
While it is likely that Mr Trump’s new invoices will include exemption for goods already in the water, there is no guarantee.
“Even if I have to pay an irrational high amount to get a truck, it is not going to get close to the invoices,” Mr Vanghele said. “I’m basically in Hail Mary mode.”
Invoices – which will add 25 % to all Mexican and Canada exports that come to these borders and an additional 10 percent for Chinese goods – could still be removed.
Mr Trump threatened to impose them on the three countries that began on February 4, but decided to stop contributions to Canada and Mexico for a month, after countries promised measures such as sending more troops to the border and the appointment of “Fentanyl Czar”.
Mr Trump imposed a 10 % invoice on all products from China, which resigned from that country. It is now threatening another 10 percent in all Chinese imports, which will come to the top of 10 to 25 percent invoices imposed on many Chinese products in its first term.
Howard Lutnick, secretary of the trade, said in an interview with Fox News on Sunday that Canada and Mexico “did a lot” to meet the president’s demands and that the situation was “cash”. Mr Lutnick also implied that at least some contributions would go ahead, although he implied that they could be lower than 25 % of Mr Trump.
“There will be invoices on Tuesday for Mexico and Canada,” he said. “Exactly what it is. We will let this be for the president and his team to negotiate.”
Canada and Mexico depend deeply on exports to the United States and Mr Trump’s threats have hit their governments in action. Delegations of officials have made trips to Washington in recent weeks, including a meeting with Mr Lutnick.
On the contrary, Chinese officials did not rush to Washington with new concessions. People who are familiar with discussions say that Beijing is still exploring what Mr Trump wants more than the relationship.
The prospect of new invoices – in addition to a variety of other proposed steel, aluminum, copper, timber and other products – has caused anxiety and frustration from businesses selling everything, from cars to breast pumps, which say that invoices will increase.
Canada, Mexico and China represent more than 40 % of US imports. Invoices that were threatened by Mr Trump would take any of the commercial measures previously taken, increasing average US duties “to levels not observed since the 1940s,” said Chad Bown, a senior associate of the Peterson Institute for the international economy.
For Canada and Mexico, most transactions with the United States have faced zero invoices since the 1980s, he said, with free trading agreements dating back to the 1960s.
“Increasing invoices from scratch to 25 % overnight is likely to be much more annoying to those who now have North America’s integrated supply chains than President Trump did in his first term,” Mr Bown said.
Of all industries dependent on North America’s trade, the automotive industry could see the biggest impact. Canada and Mexico represent almost half of US imports and exports and an even greater share of trade in bodies and car spare parts.
The automakers argued that the parties and vehicles exempt from the current free trade treaty should continue to cross the border without duties.
“Our US automakers, who invested billions in the US to meet these requirements, should not undermine their competitiveness from invoices that will increase the cost of building vehicles in the United States and investment in the US Labor Council,” Motors, Ford Motor and Stellantis.
The automakers have applied to the White House, arguing for such an exemption, but people familiar with discussions say the president did not look suspicious of the idea.
Even if invoices are not finally imposed, their threat is difficult to design the automakers, analysts say. It usually takes four or more years to design a new car and equip a factory to produce it.
“Car delivery times are generally longer than political times,” said Brian Irwin, CEO of Alvarez & Marsal, who advises the customers of the automotive industry.
Companies cannot quickly transfer production to the United States and will have to cross the invoices to customers, adding thousands of dollars to car prices. “You don’t have to be an Autos expert to see how detrimental it would be,” said John Helveston, an assistant professor at George Washington University who teaches engineering management.
There may be only one or two suppliers for certain precision accessories, he said, and no one who produces in the United States. “It is not practical to just buy from an American supplier because there is no one,” Mr Helveston said.
US companies coming from energy from all over North America were suspended last month, when Mr Trump reduced the planned energy invoice imported from Canada to 10 %, from 25 %. But the levy will be disturbed nevertheless, especially for companies that convert oil into fuel such as gasoline and diesel. This is due to the fact that US refineries were built to run into a mixture of the darkest, heavier oil found in Canada – and the lightest raw produced in the domestic market.
Midwest refineries are highly dependent on Canadian oil and, if the invoice comes into force, it will choose between paying more for oil and cutting production. Analysts generally expect that Canadian oil producers and American refiners will share the additional cost of cost. Prices on the pump could also increase moderately.
Petroleum and gas companies also begin to feel the impact of the 25 % invoice on imported steel announced by Mr Trump last month, although it will not come into force until 12 March. Prices for products such as the steel pipes used by companies to align their wells are already rising pending the invoice.
Mi They contributed reports.
