Against the advice of top economic advisers and the pleas of retail and industry executives, Pres. Trump ramped up the ongoing U.S.-China trade war late last week with a declaration that 10 percent tariffs will be levied against an estimated $300 billion worth of Chinese imports, or “List 4” products on Sept. 1.
Items impacted by the new levy will likely include footwear and apparel, but the U.S. Trade Representative has yet to disclose the final list of impacted products. The Sports & Fitness Industry Association, which says it will continue to discourage the President from increasing import duties on Chinese products, says there is a possibility that certain products will be removed from List 4 following the public comments and hearing process.
Immediate reaction to the new tariffs was swift and harsh. The Dow Jones Industrial Average fell nearly 380 points between Aug. 1 and 2 and futures were down 350 points early this morning as concerns mounted that the new tariffs could result in a pullback in consumer purchases, particularly during the crucial holiday shopping season, and that a complete resolution to the U.S.-China trade standoff may not occur until after the 2020 election.
Tim Boyle, president and CEO of Columbia Sportswear, in a statement called the proposed new tariff a “disaster for the American economy, employers and consumers,” adding it will force many manufacturers, including Columbia, to raise product prices and see almost half the cost U.S. consumers pay for footwear and apparel go to taxes.
“Raising tariffs creates uncertainty, which makes it difficult for American businesses to make investments that can continue to grow the U.S. economy,” Boyle said. “Let’s not tank the economy with the misguided conception that trade wars are fun.”
“President Trump is, in effect, using American families as a hostage in his trade war negotiations,” Matt Priest, president of the Footwear Distributors and Retailers of America, said in a statement.
The Washington, D.C.-based website Sinocism, in analyzing the development of U.S.-China trade war, is predicting an escalation of non-tariff measures by China that will penalize American firms and executives, including enforcement actions, increased inspections and nationalist outrage.