Amid brewing trade wars, fielding tariff retaliations from major trade partners, a stern warning from the International Monetary Fund, and even talk of eliminating tariffs altogether—President Trump has moved forward with a 25 percent tariff on $50 billion worth of Chinese goods.
On Friday, the Office of the United States Trade Representative released a list of products from China that will face an additional 25 percent duty as a punitive measure for what the U.S. has considered its egregious behavior around the forced transfer of American technology and intellectual property. The move comes as part of a Section 301 investigation that the USTR said found China’s acts to be “unreasonable” and “burdensome” to U.S. commerce.
“China’s government is aggressively working to undermine America’s high-tech industries and our economic leadership through unfair trade practices and industrial policies like ‘Made in China 2025,’” U.S. Trade Rep Robert Lighthizer said Friday. “Technology and innovation are America’s greatest economic assets and President Trump rightfully recognizes that if we want our country to have a prosperous future, we must take a stand now to uphold fair trade and protect American competitiveness.”
A total of 1,102 separate tariff lines for product from China will face the new tariffs. The original list released in April targeted 1,300 products, but 515 were removed and another 284 are under review for addition.
The good news, for the apparel and footwear industry, is that—at least for now—there are fewer tariffs aimed at the sector.
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The first list of already-decided-on goods, largely includes machinery used for manufacturing and technology for communication. Of the items likely to impact textiles and apparel, whether directly or indirectly, these are the products on the hit list: plows for soil preparation or cultivation; machinery for making pulp of fibrous cellulosic material; machines for extruding, drawing, texturing or cutting man-made textile materials; molds for rubber or plastics, injection or compression types, for shoe machinery; and injection molding machines for manufacturing shoes of rubber or plastics.
The second list of 284 proposed tariff lines that would target another $16 billion worth of imports from China will face further review during a public comment period and at a public hearing. The only things on that list that could impact apparel, are parts of calendaring or rolling machines for processing textiles.
USTR said Customs will begin collecting duties on the goods as of July 6.
The news has been cause for at least some celebration among those in the industry.
In a statement Friday morning, American Apparel and Footwear Association president and CEO Rick Helfenbein said, “We applaud the decision to remove most of the equipment in our domestic textile, apparel and footwear manufacturing that were proposed by the administration in April. As we have shared—including in testimony on May 16—levying a tariff on these items would have increased costs for domestic manufacturers across our industry, leading to higher prices and lower sales.”
The concern, however, is what havoc any potential new tariffs could wreak on global trade.
In a separate statement Friday, Retail Industry Leaders Association (RILA) vice president of international trade Hun Quach said, “Today’s action is a reckless escalation of the global trade war that will do little to address the underlying problems with China.”
And China won’t be sitting quietly while the U.S. acts out its own solutions to problems with China.
“China has already made clear that it will retaliate swiftly,” Helfenbein said. “China previously identified almost $1 billion worth of American cotton exports to China as a target, which will hurt American farmers and U.S. textile manufacturers, and add costs to our supply chains.”
What Friday’s tariff announcement also does little to address are the rising tensions on the global scale coming from the United States’ most major trading partners in response to President Trump’s ongoing tariff threats.
“With Canada, Mexico, the EU and China all promising retaliatory measures at the same time, America’s retailers, farmers, autoworkers and American employees throughout the global value chain are at risk,” Quach said. “We urge the administration to reconsider these actions before an outbreak of tariffs from all directions threatens the economic growth and prosperity we currently enjoy.”