WSL Future of Health Event

Trade war fallout

Print Friendly, PDF & Email

NEW YORK — The Trump administration has escalated its trade war with China by threatening new tariffs that will be levied on almost all products the United States imports from that country. The retail industry, as represented by major trade organizations, has once again voiced dismay with the administration’s trade policy.

In May the U.S. had raised tariffs from 10% to 25% on $250 billion worth of Chinese products, including a broad range of consumer goods. However, on August 1 the administration declared it would impose a 10% tariff on a further $300 billion worth of goods, including virtually all consumer products imported from China.

“As we’ve said repeatedly, we support the administration’s goal of restructuring the U.S.-China trade relationship,” said David French, senior vice president for government relations at the National Retail Federation (NRF). “But we are disappointed the administration is doubling-down on a flawed tariff strategy that is already slowing U.S. economic growth, creating uncertainty and discouraging investment.

“These additional tariffs will only threaten U.S. jobs and raise costs for American families on everyday goods.”

The tariffs imposed over the past year have not worked, French went on, adding, “There’s no evidence another tax increase on American businesses and consumers will yield new results. We urge the administration to bring our allies to the table and find new tools beyond tariffs to achieve better trade relations.”

The Retail Industry Leaders Association (RILA) was even blunter in its assessment of the newest round of planned tariffs. “The list of products these tariffs will hit is almost entirely consumer-oriented,” said Hun Quach, RILA’s vice president of international trade. “This new 10% tariff on Chinese imports is a direct hit on consumer products and family budgets, plain and simple.

“Tariffs are taxes on American consumers. And if these tariffs happen, American consumers will bear the brunt of these tactics via higher prices on everyday items like clothing, toys, home goods and electronics.”

In fact, as the Category Management Association has pointed out, consumer electronics are among the largest product categories imported from China. In addition, 41% of apparel and 70% of shoes sold in the U.S. are made in China.

The Footwear Distributors and Retailers of America (FDRA) noted that footwear from China already bears duties of upwards of 67%. If the 10% tariff is levied, the trade group estimates that the price of a typical hunting boot could increase from $190 to $222, while a popular type of sneaker that retails for about $50 could jump to almost $59.

“President Trump is, in effect, using American families as a hostage in his trade war negotiations,” said FDRA president and chief executive officer Matt Priest. “Tariffs are taxes, and this move will noticeably raise the cost of shoes at retail and will have a chilling effect on hiring in the footwear industry.

“We will not take this news lying down. This is one of the largest tax increases in American history, and it is vitally important that we fight this action on behalf of our consumers and our industry.”

Moody’s Investors Service responded to the additional tariffs with a warning that they would prove to be an economic burden at a time of decelerating growth. “The escalation of trade tensions will increasingly weigh on the global economy and supply chains in an environment of already decelerating growth in the U.S., the euro area and China,” cautioned Elena Duggar, Moody’s associate managing director.

And while the tariffs have provided a windfall for the U.S. treasury, trade economists point out that it is not China, but American consumers and companies that are footing the bill. The U.S. Chamber of Commerce, representing more than 3 million American companies, declared that the latest tariffs “will only inflict greater pain on American businesses, farmers, workers and consumers, and undermine an otherwise strong U.S. economy.”


You must be logged in to post a comment Login