tariff

Shoe Brands Unite Against Trump as Chinese Tariffs Will Hurt Business

Written by adminMay 22, 2019

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 1^st.

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.

Written by adminJune 4, 2018

Politics

Just when we thought we had a happy ending to this story regarding China and a potential trade war, both sides seemed to have hardened their positions and waiting for the other side to move.

President Trump has continued his talk of tariffs, which is really angering a lot of our allies, who all threaten to retaliate with tariffs and taxes of their own.

To ease tensions and prevent a trade war, China agreed to purchase billions of dollars of American products, including agriculture, and lower the trade deficit between the two countries. But, as of right now, it would appear Trump is not happy with the deal. He’s still threatening the Chinese with a tax on billions of dollars of imports from China.

“Both sides appear to have hardened their negotiating stances and are waiting for the other side to blink. Despite the potential negative repercussions for both economies, the risk of a full-blown China-U.S. trade war, with tariffs and other trade sanctions being imposed by both sides, has risen significantly,” said Cornell professor Eswar Prasad.

Is President Trump really willing hurt our relationship with a prominent ally in China, who has the second largest economy in the world? The answer appears to be yes. He seems more than willing to wreck whatever relationship is necessary to keep American industry at the forefront and recover some of the billions of dollars lost in unfair deals.

Peter Navarro, who is the director of the White House National Trade Council, confirmed as much on Fox News when he stated China hasn’t been that good of a friend to us.

They’ve been aggressive in the South China Sea, threatened to steal intellectual property, went behind our backs to supply North Korea with goods after committing, in public, to join in the sanctions, and according to the president, has raked us over the coals in regard to trade for many decades.

“That’s a relationship with China that structurally has to change. We would love to have a peaceful, friendly relationship with China. But we’re also standing firm that the president is the leader on this,” said Navarro on “Sunday Morning Futures.”

Trump is still considering more tariffs on $50 billion worth of China’s exports and another $100 billion they would consider taxing to make up for the massive deficit. If this goes through, China threatens taxes and tariffs of their own and to cancel any of the new trade deals that have been hammered out.

It appears to be a tit for tat stare down between the two world’s economic superpowers. No one knows if Trump is serious about imposing tariffs or is just using the tactic for positioning. So far, he has been able to successfully get many countries to come to the table willing to renegotiate deals just to stay in the good graces of the U.S.

President Trump has long believed that other countries have taken advantage of American industry and reap far more benefits from trade than we get in return. It was one of many economic promises he made during the campaign.

Tariffs and a trade war would be bad for the world’s economy and for consumers, who would be required to pay more for tariffed items to cover the increased cost.

We’ll continue to cover this story as it develops.

Written by adminMay 31, 2018

Credit & Debt Settlement

We’ve been doing our best to keep track of the tariff situation, as we know it will mostly impact the consumers of products than it will any one country.

After the U.S. and China seemed to cool down talk of a trade war, Trump isn’t backing down asserting his desire to improve the balance of trade he says has been unfair for so long. While he was able to successfully negotiate with China, the same can’t be said for the EU.

Last Thursday, Trump’s team and European officials made one last attempt to negotiate a deal in Paris, but it isn’t looking promising, potentially damaging trade relationships with European countries and inflaming tensions with our allies.

According to France’s finance minister Bruno Le Maire: “Global trade is not a gunfight at the OK Corral. It’s not about who attacks whom, and then wait and see who is still standing at the end.”

You can tell Europe is frustrated with the prospect of tariffs set to take place on aluminum and steel before the end of this week. It doesn’t appear a new deal will be struck beforehand, but the determination will be whether Europe thinks Trump will actually go forward with his plans.

He wants to impose tariffs of 25% for steel and 10% on aluminum in an attempt to force companies that use cheaper, foreign steel and aluminum to buy from the U.S. instead. So far, President Trump has only focused on Asia, giving our allies a reprieve, which expires at the end of the week.

The fear of everyone else not named Donald Trump is that a retaliatory trade war with Europe is the last thing the global economy needs, especially now when things have been on the upswing for the most part.

If the tariff goes through, and a new deal can’t be made, it’s expected the Europe will impose tariffs of their own. Peanut butter, orange juice, and other U.S.-made products are on the list the EU has threatened will receive tariffs if Trump goes through with it.

“This will only lead to the victory of those who want less growth, those who don’t think we can develop our economies across the world. We think on the contrary that global trade must have rules in a context of multilateralism. We are ready to rebuild this multilateralism with our American friends,” said Le Maire

Trump hopes that tariffs will help spur American economic growth and has rallied against unfair trade deficits since he started campaigning. But French President Emmanuel Macron has a different idea.

“Unilateral responses and threats over trade war will solve nothing of the serious imbalances in world trade. Nothing. These solutions might bring symbolic satisfaction in the short term. … One can think about making voters happy by saying, ‘I have a victory, I’ll change the rules, you’ll see.’”

His belief is tariffs won’t help. It might bring a short boost in economic success, but due to the higher prices and retaliatory tariffs, eventually someone is going to lose their job, leading ultimately to higher unemployment.

Written by adminApril 16, 2018

Credit & Debt Settlement

The United States is on the verge of a trade war.

In March, President Trump slapped a tariff on steel imports from China and other countries to promote job growth in the steel industry here. The consequences of such a move has doubled the price of steel in a matter of days.

Charlotte-based company Howard Steel has reported to Fox Business that the price of steel started rising the second the announcement was made and changed with each passing day.

“As soon as they even talked about a tariff, we were getting price increases, and they were rapidly going up,” Howard said. “What you bought one day, three days later, even that price had gone up. There was nothing consistent. We still haven’t reached the apex, and I don’t know where it’s at,” said James Howard, owner of Howard Steel

Right now, steel costs around $.68/pound, which is up dramatically from $.38 before the tariffs were announced.

Howard says the tariff is good in theory, and promoting American industry is usually a source of pride for companies like his, but in the end, the price increase is just going to be passed down to the consumer.

“The way I feel about it, in theory it’s a good idea, but I hate to say this, sometimes we can be our own worst enemy, and there’s a little bit of greed that goes through there. Anytime you get these price increases, and the orders are still coming in, well they’re just going to give you another price increase,” he said to Fox Business.

China’s Retaliation

The country hardest hit by these tariffs, other than the United States itself, is undoubtedly China. China is where we bought most of our steel previously, impacting the industry here in the States. Now that industries are buying American steel again, it’s hitting China’s pockets fairly hard.

That’s why China retaliated almost immediately, announcing that they will slap their own tariffs on 106 different U.S. exports, such as soybeans, whisky, and cars. They plan to target as much as $50 billion worth of our products, which is scaring literally everyone else into believing a massive trade war between the world’s two largest economies is only about to heat up.

And they’re right.

Trump Targets Chinese Tech

Throughout his campaign, candidate Trump promised to fight back against what he called ‘unfair trade deals’ the U.S. has with numerous countries, like China and Japan. He says we’ve been at a disadvantage and losing billions in trade deficits for decades.

The steel tariffs were just the first part of Trump’s plan.

Next, he says, the focus will be on China’s tech industry as a means of punishment for technology transfer policies that hurt the U.S. Trump hopes to hit $60 billion worth of ‘largely high-tech’ products within the next few months.

Which China continues to improve their technology manufacturing to boost their economy, perhaps Trump is looking to take a swing at the market to remain a global technological superpower.

Not all hope is lost, though.

According to Robert Lighthizer, a U.S. trade representative since the Reagan Administration, it’s an old tactic to announce tariffs to force both parties to the table for renegotiation.

In the end, no one wants to see a trade war that could ultimately hurt both economies. And where the U.S. and China goes, the rest of the world will follow. Hopefully this is nothing more than a negotiation tactic that will lead to better and improved trade relations between the U.S., China, and everyone in between.

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