Footwear makers ask US to reconsider tariffs
US footwear giant Nike and upscale shoemaker Allen Edmonds have joined the chorus of business groups calling for the White House to hit the brakes on its move to raise duties on Chinese footwear imports and other products.
A week after US President Donald Trump threatened to impose tariffs on the remaining $300 billion of goods imported from China, more than 100 US footwear companies, brands and retailers signed an open letter to the president saying the policy “would be catastrophic” for consumers, businesses and the US economy.
“Your proposal to add tariffs on all imports from China is asking the US consumer to foot the bill,” said the letter, dated on Monday and signed by the companies. It was posted on the website of the Footwear Distributors and Retailers of America.
“It is time to bring this trade war to an end,” the letter said.
Unlike the first few rounds of tariffs that focused more on industrial and agricultural products, the proposed tariffs on $300-billion-worth-Chinese imports target mostly consumer products, including sneakers, clothing and furniture.
Trump, on his Twitter account, has asserted that “there is no reason for the US Consumer to pay the Tariffs”.
The open letter from the companies, however, said “there should be no misunderstanding” that US consumers pay for tariffs on imported products.
It is an “unavoidable” fact that as prices go up at the border due to transportation costs, labor rate increases or additional duties, the consumer pays more for the product, the footwear trade and business association said.
“On behalf of our hundreds of millions of footwear consumers and hundreds of thousands of employees, we ask that you immediately stop this action to increase their tax burden,” the group said.
The group’s reasoning echoes an earlier comment from David French, senior vice-president of government relations at the National Retail Federation, who said, “Saying that China is paying these tariffs doesn’t hold water.”
About 99 percent of all shoes sold in the US are imported. Last year alone, it imported 2.5 billion pairs, nearly 70 percent of which came from China, making the Asian country the largest source of US shoe imports, according to the footwear association.
Commenting on the suggestion of quickly shifting sourcing to countries other than China under the tariff era, the footwear association said there had been companies moving away, but “footwear is a very capitalintensive industry, with years of planning required to make sourcing decisions, and companies cannot simply move factories to adjust to these changes”.
Douglas H. Paal, vice-president of the Asia Program at the Carnegie Endowment for International Peace, said the footwear industry’s complaints are justifiable, albeit a little late.
“Since their issues do not involve critical technologies, there might be room for the administration to offer a degree of relief,” Paal said.
A hearing on the proposed tariffs on Chinese imports will take place on June 17, according to the Office of the US Trade Representative.
Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics in Washington, said the footwear association’s letter will add to the pressure on Trump to reach a deal with China.
“It will not be totally ignored,” Hufbauer said.
Over the past few weeks, business groups have voiced their concerns over the escalating tariffs on Chinese imports.
The Retail Industry Leaders Association, for example, said in a statement: “The administration’s decision to announce a tax on every product coming from China puts America’s entire economy at risk. Americans’ entire shopping cart will get more expensive,” it said.