Hundreds of US footwear brands call for end to China trade war
By Josh White
Date: Tuesday 21 May 2019
(Sharecast News) - A total of 173 footwear manufacturers, importers and retailers in the US have called on the US president to re-think his approach to the trade war with China, describing the recent tariff hike on imports from the People's Republic as "catastrophic".
In the letter sent by the Footwear Distributors and Retailers of America (FDRA) on behalf of the brands, including trainer leaders Adidas America and Nike, high-end brands such as Florsheim and Allen Edmonds, and retailers including JCPenney, the lobby group asked President Donald Trump to "immediately" remove footwear from the most recent Section 301 list, which was published on 13 May.
It said the proposed additional tariff of 25% on footwear would be "catastrophic" for consumers, companies, and the American economy as a whole.
"There should be no misunderstanding that US consumers pay for tariffs on products that are imported," the FDRA said, going against Trump's previous assertions that China would be paying the price for the punitive tariffs.
"As an industry that faces a $3bn duty bill every year, we can assure you that any increase in the cost of importing shoes has a direct impact on the American footwear consumer.
"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 FDRA said that the "significant" tax increase, in the form of tariffs, would impact every type of shoe, adding that it estimated the proposed actions would add $7bn in additional costs for customers each single year.
"This dramatic increase would be on top of the billions Americans already pay as a result of the current tariff burden on footwear imports that was started in 1930."
The industry claimed that high footwear tariff rates fell "disproportionately" on working class individuals and families, noting that while US tariffs on all consumer goods averaged 1.9%, they were around 11.3% on average for footwear and reached rates as high as 67.5% for some shoes.
"Adding a 25% tax increase on top of these tariffs would mean some working American families could pay a nearly 100% duty on their shoes," the group claimed.
"This is unfathomable."
It also countered claims that industries could quickly shift sourcing to countries other than China in the wake of these additional tariff threats, explaining that while the industry had been moving away from the country for "some time", footwear was a "very capital-intensive" industry, with years of planning required to make sourcing decisions.
That meant companies could not just move factories to adjust to the changes, the FDRA claimed.
"Any action taken to increase duties on Chinese footwear will have an immediate and long-lasting effect on American individuals and families.
"It will also threaten the very economic viability of many companies in our industry."
The group asked that, on behalf of its "hundreds of millions" of footwear consumers and "hundreds of thousands" of employees, Trump immediately stopped the tariff action on footwear.
"Your proposal to add tariffs on all imports from China is asking the American consumer to foot the bill.
"It is time to bring this trade war to an end."
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