Fans of NBA could feel impact of China trade wars
NEW YORK (AP) — That LeBron James jersey could get a little more expensive.
Companies that make clothing and shoes for the National Basketball Association players are in the crosshairs of President Donald Trump’s escalating China trade wars.
So, the question is, will American fans of sports stars like Los Angeles Lakers’ James be willing to pay higher prices for the gear?
The stakes are high as U.S. sales from sports licensed merchandise including NBA items rang up $21 billion last year, according to Licensing International, a trade group. Sales on NBAStore.com rose 15 percent during the 12-month period through August, according to the league. And many of the sports brands ranging from Adidas to Puma rely on China for at least some of their sourcing.
Moreover, experts worry China could impose penalties on Western brands who sell there at a time when business in that country is exploding. Some also believe U.S. fans might turn to counterfeit merchandise if they don’t want to pay higher prices.
“When you raise prices on legitimate goods, you encourage the production of illegitimate goods,” said Steve Lamar, executive vice president of The American Apparel and Footwear Association, a trade group. “We’re definitely seeing pressure on brands. We’re just waiting for the other basketball shoe to drop.”
Until now, consumers were largely spared from higher prices in Trump’s previous round of import taxes. That has changed. Starting Sept. 1, the U.S. government began collecting 15 percent on $112 billion in Chinese imports, on a wide array of merchandise including basketball jerseys, basketball shoes, basketballs and even hoops. Higher tariffs are set to hit another batch of Chinese products — $160 billion worth on Dec. 15 and include other sports products, according to the American Apparel &Footwear Association.
President Trump tweeted Wednesday that planned tariff increases on another $250 billion in Chinese imports, which would include sports bags, would be delayed until Oct. 15, from Oct. 1. Tariff increases are set to go from 25 to 30 percent.
Many sporting goods companies, including Adidas, Under Armour and Spaulding declined to comment on how their business is being affected by the China trade wars. But like many companies, sport brands have been diversifying their sourcing away from China to factories in Vietnam and Bangladesh for the last several years even before escalating tensions between the U.S. and China.
Under Armour has been working for several years to reduce sourcing in China.
“With current tariffs, we actually are not being affected very much at all, “Patrick Fisk, president and chief operating officer at Under Armour told CNBC last week. “We only have 10 percent of what comes into the U.S. from China. So the current state, we’re OK.”