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New Tariffs on China Won’t Bode Well for Skirting a Trade War

You can’t go anywhere in Washington, D.C.—not the office break room, not lunch at The Palm, and not the hearing room at the International Trade Commission, where we testified on Wednesday about the proposed “Section 301” tariffs—without talking about the No. 1 question on every Washington insider’s mind: Are we heading for a trade war with China?

While no one knows what the next executive order, or tweet, will bring in terms of trade policy, those of us in the fashion industry do know a trade war with China—and specifically, new tariffs on fashion and apparel products manufactured in China—will raise prices for American families, harm jobs in the United States, and won’t do anything to solve concerns about China’s IP policies and practices.

In 2017, U.S. apparel imports grew just over 3 percent in volume and about 1 percent in value. China remains the dominant supplier of these products, supplying 49 percent of total textile and apparel products, and just over 40 percent of apparel, without any clear contender to replace China should the much-hyped trade war become reality. (The No. 2 supplier of apparel, Vietnam, is far behind, shipping just 13 percent of our apparel products.)

So, new tariffs on apparel imports from China would cause a major dent in American families’ pocketbooks, amounting to a huge, regressive tax increase just when families are thinking about purchasing new shorts and flip flops for summer, or in a few months, back-to-school clothes, shoes, and backpacks. Tariffs on the fashion industry are already the highest among manufactured goods, reaching 32 percent for man-made fiber apparel and 67 percent for footwear. Why burden American families even more?

Tariffs would have a negative impact on the American jobs created by fashion brands and retailers, too. Today, trade supports high-quality, high-paying design, product development, logistics, sourcing, e-commerce and service jobs, to name a few. In fact, according to studies of our industry’s global value chains, 70 percent of the value of imported clothing remains here in the United States—even if the clothing is manufactured outside of the United States. Add new tariffs, and our members, some of the most iconic American brands and retailers, will be looking to cut jobs, not create them.

And finally, the Trump Administration claims they want to punish China for their IP practices, but we know these tariffs won’t help. From the experience of USFIA member companies—who source and sell products around the world, including and especially in China—we know the best way to address these concerns is action at the multilateral level that includes other global trading partners.

On Wednesday, we joined other speakers from the fashion and retail sectors in testifying at the Office of the U.S. Trade Representative hearing, which will help Administration officials decide which products to include on the list of products manufactured in China subject to additional, retaliatory tariffs. All of us in the industry agreed: tariffs on fashion and apparel will only punish American families and harm American jobs and the economy, while doing nothing to address IP concerns. While we had just five minutes to speak, we think our message came through loud and clear: fashion is made possible by global trade, and we strongly urge the Trump Administration to support America’s iconic fashion brands and retailers—and importantly, the jobs they create right here in the United States—by keeping our products off the list of products subject to new tariffs.

Julia K. Hughes is the president of the United States Fashion Industry Association (USFIA). She testified on Wednesday, May 16th, during USTR’s Section 301 investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation.

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