While President Trump is fully content putting full pressure on China for a new deal, that pressure is returned back onto U.S. businesses. Tariffs hurt everyone. They make everyday products we buy and sell much more expensive. In that way, tariffs are taxes. Both the Chinese and U.S. citizens are feeling the crunch as this trade war continues between the two largest economic powers the world has ever seen.
One industry reeling from this latest round of tariffs are shoe companies. They feel as if adding a 25% tariff on footwear to the $300 billion worth of Chinese goods is ‘catastrophic’. So, 170 footwear companies got together and wrote a letter to the president to convince him not to add their products to the list.
“As leading American footwear companies, brands and retailers, with hundreds of thousands of employees across the U.S., we write to ask that you immediately remove footwear from the most recent Section 301 list published by the United States Trade Representative on May 13, 2019. The proposed additional tariff of 25 percent on footwear would be catastrophic for our consumers, our companies, and the American economy as a whole,” the letter states.
Tit for Tat Trade War
As President Trump threatened to increase more tariffs after China wasn’t giving in to his trade deal, China decided to retaliate. They stuck $60 billion worth of U.S. goods with a tariff on their own. Both sides escalating each other is even worse news for consumers. These tariffs are set to take place on June 1st.
Some of the big names who signed the letter include Nike, Adidas, Under Armour, and Crocs. New Balance was one big name absent from the letter, as it’s believed their CEO is a Trump supporter. In the letter, these companies point out that the tariffs will hit hardest the most vulnerable consumers in the country.
“High footwear tariff rates fall disproportionately on working class individuals and families. While U.S. tariffs on all consumer goods average just 1.9 percent, they average 11.3 percent for footwear and reach rates as high as 67.5 percent. Adding a 25 percent tax increase on top of these tariffs would mean some working American families could pay a nearly 100 percent duty on their shoes. This is unfathomable,” the letter continued.
Made in China
It’s estimated that nearly 84% of all footwear sold in the United States is made in China. That means the entire footwear industry is set pay a heavy price. But one can already see President Trump’s response to the letter. He already told the steel and auto industries to make more products in the United States.
Relying on foreign companies to make cheap products is not his path to economic superiority or a way to create more U.S. jobs. That means Trump is less likely to give in to the demands by these shoe companies to exempt them from the tariff list. The economic impact is currently unknown, but everyone is hoping the two countries sign a new trade deal quickly.
