The president said “we don’t need China” and the United States would be “better off without them.”
Trump continued, saying he would “order” American companies to look for alternatives to manufacturing in China — something the National Retail Federation called “unrealistic.”
“For years, retailers have been diversifying their supply chains, but finding alternative sources is a costly and lengthy process that can take years. It is unrealistic for American retailers to move out of the world's second largest economy, as 95% of the world's consumers live outside our borders,” David French, NRF’s senior vice president of government relations, said in a statement.
“Our presence in China allows us to reach Chinese customers and develop overseas markets. This, in turn, allows us to grow and expand opportunities for American workers, businesses and consumers,” he added in a statement to Yahoo Finance.
....better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing..— Donald J. Trump (@realDonaldTrump) August 23, 2019
Concerns about the rule of law
It’s not clear what authority the president believes he has to make such demands of American companies. The White House did not respond to a request for clarification.
“There are extreme circumstances, like a war, where the president might have the authority to do things like this, but we’re just not in one of those situations,” said Simon Lester, associate director of the Cato Institute’s Center for Trade Policy Studies. “So this doesn’t seem to me like an enforceable executive order. It’s just something he said on Twitter in a moment of irritation.”
In an interview with Yahoo Finance, Lester said the tweets seemed like an “off-the-cuff rant,” but serious or not — the tweets are concerning.
“It gives me concerns about the economy, about the rule of law,” he said. “I mean, I think it’s a bad thing to have the president saying these things even if in fact they don’t mean much. It would be better if he just didn’t say things like this because it undermines confidence, I think, in our political system.”
In a statement, the U.S. Chamber of Commerce acknowledged the need to address China’s unfair trade practices, but stressed the importance of a trade agreement between the two countries.
“Despite our concerns, the 40-year-old trade relationship between our two countries has been for the most part productive, constructive, and mutually beneficial. U.S. companies have been ambassadors for positive changes to the Chinese economy that continue to benefit both our people,” said Myron Brilliant with the U.S. Chamber of Commerce.
Brilliant urged both sides to resume negotiations quickly.
"While we share the President’s frustration, we believe that continued, constructive engagement is the right way forward. Time is of the essence. We do not want to see a further deterioration of US-China relations,” Brilliant said in a statement.
The US-China Business Council called on the United States and China to work together on a trade deal.
“As many as 2.3 to 2.6 million American citizens work within the framework of US-China trade and investment. American workers, farmers, ranchers, consumers, and companies will all be hurt by increased trade and investment tension. The downward cycle of tariff and counter-tariff should stop before more damage is done,” said the Council in a statement.
The Business Roundtable said the tit-for-tat escalation of the trade dispute could hurt economic growth, workers and consumers.
“The Administration’s objective should continue to focus on real structural reforms in China that address unfair trade and investment practices. Broadly restricting or putting up barriers to commerce with foreign nations risks the millions of American jobs that depend on international trade,” said the Business Roundtable in a statement to Yahoo Finance.
‘SEARCH FOR & REFUSE all deliveries of Fentanyl’
Trump also said he was “ordering” FedEx, Amazon, UPS and the U.S. Postal Service to search for and refuse shipments of fentanyl coming from China. Throughout negotiations, Trump has pressured Xi to stop the flow of the opioid fentanyl into the United States — but says so far, Xi has not acted.
....your companies HOME and making your products in the USA. I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States. Also, I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE,....— Donald J. Trump (@realDonaldTrump) August 23, 2019
....all deliveries of Fentanyl from China (or anywhere else!). Fentanyl kills 100,000 Americans a year. President Xi said this would stop - it didn’t. Our Economy, because of our gains in the last 2 1/2 years, is MUCH larger than that of China. We will keep it that way!— Donald J. Trump (@realDonaldTrump) August 23, 2019
“UPS follows all applicable laws and administrative orders of the governments in the countries where we do business. We work closely with regulatory authorities to monitor for prohibited substances,” a UPS spokesperson said in a statement.
FedEx told Yahoo Finance it already has “extensive security measures” in place to “prevent the use of our networks for illegal purposes.”
“We follow the laws and regulations everywhere we do business and have a long history of close cooperation with authorities. FedEx supported passage of the STOP Act and encourages accelerated implementation and enforcement of its provisions to protect the health and safety of the American people,” said a FedEx spokesperson in a statement to Yahoo Finance.
Amazon has not yet responded to a request for comment.
Jessica Smith is a reporter for Yahoo Finance based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.