A tariff reduction — yes, reduction — bill is stalled in Congress

(This post originally appeared on The Washington Post)

Since President Trump threw the first volley in a trade spat with China by slapping import duties on steel and aluminum imports, as well as many more products from that country, fears of a full-blown trade war have rattled businesses, markets and lawmakers in the United States. China has responded with its own tariffs on U.S. goods, and on Friday, Trump threatened additional levies on $100 billion in Chinese goods.

“We have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion,” Trump recently tweeted. “We cannot let this continue!”

But in the midst of this mounting trade rhetoric a bipartisan, Obama-era bill that aims to reduce – yes, reduce – tariffs on about 1,600 other products recently passed the House of Representatives and has been sitting with the Senate since mid-January.

Given the current sentiment it doesn’t look likely that this bill will actually become law any time soon.

However, if Congress does manage to pass the Miscellaneous Tariff Bill Act it could have either a positive or negative impact on some small and not-so-small businesses, the Chicago Tribune reports.

One example is the V. Formusa Company, a 120-year-old firm that employs about 20 people on Chicago’s West Side. V. Formusa imports and distributes food from Italy, including a “Marconi-brand giardiniera,” a spicy pickled-vegetable mix and pepperoncini. Its executives are hoping that Congress makes good on reducing some of those 1,600 tariffs as some of the products the company imports would be affected. The company says it pays a hefty 10 percent to 15 percent tariff on many of their imported items.

V. Formusa’s president says any reduction of tariffs would be passed down to his customers. “There’s still competition out there,” he told the Tribune. But “the consumer is the one that is going to save.”

Thirty miles away, another, much larger company is hoping the bill never sees the light of day.

Inventus Power makes rechargeable power systems that are used in items ranging from tools to medical equipment. Inventus employs about 2,500 people. The firm wants the United States to maintain its tariffs on foreign goods, particularly from China, as a means of price protection.

“There’s already an unfair advantage with [Chinese] dominance in this industry,” said Anson Martin, a vice president at the 60-year-old firm. As trade war fears grow, it looks like Martin may be the winner here.

Referring to the lack of movement on the Senate bill, William Reinsch, a foreign trade expert at the Center for Strategic and International Studies, told the Tribune, “There was a feeling that it was not the right time to do this, given what Trump was doing essentially in the opposite direction, that it would be sending mixed signals.”

The tariff reduction bill would be “small cheese” if China “overreacts” to the Trump administration’s tariff threats and retaliates disproportionately, he said.