SALT LAKE CITY — Rep. John Curtis, R-Utah, said during a congressional hearing Wednesday on China's trade practices that the looming trade war over tariffs ordered by President Donald Trump is hitting Utah companies hard.
"The worry in Utah is the path is littered with dead companies along the way," Curtis said, citing the unpredictability of the impact of imposing a list of tariffs announced Tuesday on $200 billion in goods from China.
China is expected to retaliate for the tariffs, a 10 percent assessment on a wide range of imports including fruits, rice, shrimp, frozen pork, baseball gloves, quartz, electric vehicle batteries, machetes, birds eggs, pet food and cigarettes.
"Where does this end?" Curtis asked the expert witnesses testifying before members of the House Foreign Affairs Committee for a hearing on "China's predatory Trade and Investment Strategy."
The answers were not encouraging.
"This reminds me of two 8-year-olds having a staring contest waiting to see who's going to blink first," said William Reinsch, who holds the Scholl Chair in International Business at the Center for Strategic and International Studies.
Trump "has only one tactic, which is escalate (and) up the ante," Reinsch said, making him skeptical that there will be successful negotiations to stop the tariffs during the two-month review process, which includes hearings in August.
"I'm very gloomy that where this goes is in the end, all trade is subject to punishing tariffs and there's going to be a lot of collateral damage on both sides," the former commerce undersecretary in President Bill Clinton's administration said.
Derek Scissors, a resident scholar at the conservative American Enterprise Institute, said the tariffs are not inconsistent with the president's committment to reducing the nation's trade deficit with China.
"It's going to take some work to get the trade deficit under control, which means we may get a series of 10 percent tariffs applied to all Chinese goods for a while," Scissors said. "But that's where it's going to end."
Curtis told the Deseret News after the hearing the tariffs already are having real-life consequences in Utah, unlike the analogy of children trying to stare each other down raised in the hearing.
"We have real people and real businesses that this is hurting. It's a major threat to many Utah businesses," the 3rd Congressional District representative said. "I don't think we should take that lightly."
Curtis said he is co-sponsoring legislation in the House similar to a nonbinding measure calling for Congress to have a role in imposing tariffs in the name of national security that passed overwhelmingly in the Senate Wednesday.
Rep. Mia Love, R-Utah, is supportive of the House legislation, according to her spokesman, Rich Piatt. He said Love expects to question Treasury Secretary Steven Mnuchin about the trade policies at a House Financial Services Committee hearing Thursday.
Salt Lake Chamber President and CEO Derek Miller said tariffs are "a big concern and not just a theoretical concern." Earlier this year, tariffs were imposed on steel and aluminum from Canada, Mexico and the European Union citing national security.
Those tariffs have helped drive up building costs at a time when the state is experiencing a construction boom to help alleviate a housing shortage, so already skyrocketing prices are increasing, Miller said.
A recent World Trade Center Utah study done when Miller was still head of the organization showed retalitory Chinese tariffs threaten more than $60 million of the state's exports to China and Hong Kong, nearly $850 million in 2017.
The impact primarily affects four industries — aluminum recycling, ranchers and beef processing, plastics manufacturing and agriculture — the study found. Also in jeopardy are nearly $20 million in pork products and $300,000 in fruit.
Miller said the state's agriculture industry may not be hit as hard as construction has been, but the impact could be greater when the domestic market is flooded with products no longer sold overseas, resulting in plummeting prices.
Still, he said, there's reason to hope.
"The positive prospect is if we could turn away from all of the threats and the tariffs to actually making deals," Miller said, noting Trump was elected on his reputation as a dealmaker. "So let's get out and make some deals with these countries."
Tariffs were discussed Wednesday during Gov. Gary Herbert's closed-door meeting with Xu Xueyuan, minister of China's embassy in the United States, the governor's spokesman, Trey Hansen, said.
"The governor has consistently expressed his concern and disapproval of the application of tariffs because of their unintended consequences. This remains the case," Hansen said.37 comments on this story
He describing the discussion between the governor and the Chinese minister as about tariffs "in broader terms, not in their specific application to Utah."
Herbert said in a statement it was a honor to host the minister and her delegation "for constructive and collaborative discussions surrounding how to better improve Chinese-U.S. relations, especially at the sub-national level."
The governor said their "dialogue was formal and friendly and we agreed that the United States and China could both benefit from free and fair trade between our respective nations."