In a letter to the president sent Wednesday, the Americans for Free Trade Coalition—which includes industry and retail organizations like the American Apparel & Footwear Association (AAFA), Footwear Distributors and Retailers of America (FDRA) and the National Retail Federation (NRF)—implored Trump to “postpone all tariff rate increases on Chinese goods that are scheduled to take effect this year.”
Currently, new tariffs on Chinese apparel and footwear imports are scheduled to take effect on Sunday, Sept. 1, with another set from the Tranche 4 tariffs seeing the additional duties roll out on Dec. 15. On Oct. 1, existing 25 percent tariffs on $250 billion worth of goods from China are set to climb to 30 percent.
“These tariff rate increases—some starting as early as Sunday—come at the worst possible time, right in the middle of the busy holiday shipping period,” the Coalition wrote in the letter. “Action is needed by you to protect American businesses, workers and consumers this holiday season.”
Trump’s delay of some tariffs to Dec. 15 reportedly was an effort to protect holiday retail and allow some companies to stock their shelves before the tariffs hit. But with as much as 77 percent of apparel staring Sept. 1 tariffs in the face, and considering apparel remains a major holiday buy, the impact on peak season retail could still be damaging. Some experts believe the adverse effects could extend through the first two quarters of the coming year.
“In remarks earlier this month, you recognized that delaying some tariffs would avoid hurting American consumers over the holidays. Unfortunately, a large portion of holiday merchandise will still be hit by September and October tariff increases at an even higher rate than was initially anticipated,” the letter continued. “With some products facing tariffs as high as 30 percent, many businesses will have no choice but to pass along those costs to consumers. Price increases will likely hit shoppers just as they are making their holiday purchases.”
What’s more, many American businesses still rely on inputs from China, which means new tariffs will also wreak havoc on U.S. manufacturing—something Trump indicated as recently as last week that he wanted to see happen, particularly in light of the ever-escalating trade war.
“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing…your companies HOME and making your products in the USA,” the president tweeted last Friday.
Though he might not, in fact, order U.S. businesses out of China, the sentiment was clear—and also in contrast with what the new tariffs would do.
“Because many of our industrial inputs are still sourced in China, these new tariffs will act as a tax on U.S. manufacturers and U.S. farmers, whose costs will now increase. And because these tariffs were announced with little warning, it is impossible for U.S. importers to share the burden with supply chain partners in China or shift their production to other countries,” the Coalition’s letter noted. “The full adverse impact of these tariff increases will be felt entirely in the United States and could represent one of the largest tax increases in American history.”
On the footwear side of the business, the fight has been impassioned.
In a separate letter to the president Wednesday, more than 200 American footwear companies urged Trump to cancel the tariffs altogether.
“Although tariffs on some products from China will be delayed until December, the majority of footwear product lines face an added 15 percent tariff on September 1st. This American tax is on top of already high footwear tariffs that average 11 percent and reach 67 percent on some shoes. The highest tariff rates generally fall on lower value shoes and children’s shoes, driving up costs for hardworking American families,” the letter noted.
When import costs for footwear rise and fall, either based on the price of materials, transportation, labor or tariffs, those cost increases or savings almost immediately land in the consumer’s lap, the letter noted. The added 15 percent tax, according to FDRA, will cost U.S. consumers an additional $4 billion each year.
“The September 1st tariffs on footwear will also mean these massive tax increases hit tens of millions of Americans when they purchase shoes during the holiday season,” the letter said, noting that what’s perhaps even worse for the consumer, “The tariff threat on China has the potential to drive up prices in other footwear sourcing countries, as demand has spiked with limited production capacity. As a result, U.S. consumers could face higher prices even before the new tariffs take effect.”
President Trump largely has been mum on next steps for the tariffs with the rollout date just days away, meaning that at this stage, a delay for the Sept. 1 tariffs may be unlikely. The industry, however, is making its best attempt to be heard.
“This uncertainty the China trade war has brought to our industry is stifling U.S. growth and halting capital investment in jobs, infrastructure, technologies, and more competitive pricing for our customers,” the footwear companies’ letter warned. “On behalf of our hundreds of millions of American footwear consumers and hundreds of thousands of employees, we ask that you immediately terminate the scheduled tariff increases on footwear.”