President-elect Joe Biden has yet to take office, but a key footwear trade group is already putting the industry’s thorniest pain points firmly on his radar.
Matt Priest, president and CEO of the Footwear Distributors and Retailers of America (FDRA), has sent a letter to Biden urging action on two key items for the nation’s footwear sector–removing 301 tariffs and re-entering the Trans-Pacific Partnership (TPP), now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
“We need these actions because American families are already paying tens of millions [of dollars] more than they should this year as a result of antiquated trade policies,” Priest wrote.
Noting that FDRA represents more than 500 footwear companies and brands across the U.S., he said they depend on international trade to reach global markets and deliver more than 2.4 billion pairs of shoes to the U.S. market every year.
“The trade policy of the past four years created numerous challenges for our industry,” Priest wrote. “We were hit particularly hard by the President’s tariff actions because our industry already operates under extremely high and outdated tariffs first put in place in the 1930s.”
While tariff rates assessed on imported consumer goods average just 1.9 percent, footwear tariffs average 12 percent and can reach rates up to 67 percent, he added.
“We were encouraged when Vice President-elect Harris highlighted the impact tariffs have on American consumers during the Vice Presidential Debate,” Priest wrote to Biden. “In fact, for our industry, the highest tariff rates most often fall on lower-value shoes and children’s shoes, raising costs for working class individuals and families on a product they have to buy as a necessity.”
The Trump administration added to this tariff burden, which already totals nearly $3 billion a year, with new 301 tariffs on Chinese-made products, which resulted in “tremendous confusion, uncertainty, and added costs for U.S. footwear companies,” he wrote.
“Businesses cannot move factories in a short timeframe to adjust to any new tariff burden,” Priest wrote. “Those that were able to move some production to Vietnam now face a threat of potential tariffs on Vietnamese-made goods resulting from the administration’s launch of a Section 301 investigation into Vietnam. Hitting American companies and their consumers with new taxes, in the form of import tariffs, is simply not the right approach.”
He said to address these key trade issues with China, the U.S. should work with allies in the region and FDRA strongly supports re-entering the CPTPP.
“This agreement offers a critical strategic tool for U.S. leadership in the Asia-Pacific region and a way to drive change without imposing tariffs on U.S. companies,” Priest wrote. “The agreement would create significant economic opportunities for U.S. businesses, farmers and consumers. For the footwear industry, CPTPP would generate $6 billion in savings across the first decade of its implementation, which would mean consumer value, innovation and U.S. job creation. With the recent signing of the Regional Comprehensive Economic Partnership (RCEP) amongst China and 14 other nations, it is vitally important that the United States reasserts its leadership in the region to counteract China’s influence. Joining the CPTPP would accomplish this goal.”