President Donald Trump‘s announcement of a 10% tariff on an additional $300 billion worth of Chinese goods marked a sudden end to the temporary truce in a yearlong trade war between the world’s two largest economies.
The news not only sent Wall Street into a tailspin but also jolted the footwear industry — with executives bemoaning the impact of the levies on manufacturers, retailers and ultimately consumers. It came only a day after representatives from Washington and Beijing wrapped up a round of negotiations, with another meeting scheduled for September in the U.S. capital.
“We look forward to continuing our positive dialogue with China on a comprehensive trade deal,” Trump wrote on Twitter, “and feel that the future between our two countries will be a very bright one!”
The fourth tranche of tariffs — set to hit footwear, apparel and other accessories on Sept. 1 — comes after months of uncertainty. Fashion leaders hit Washington, D.C. in June for seven days of hearings that allowed businesses to share testimony on the critical issue. Here, company leaders speak about the latest development in the U.S.-China trade dispute.
Tim Boyle, CEO, Columbia Sportswear
“If that happens, it will be a disaster for the American economy, employers and consumers. If tariffs are imposed, Columbia Sportswear Company — along with many other manufacturers in our industry — will be forced to raise prices on our products. This is a massive tax on employers and consumers, not on China.”
Marc Schneider, CEO, Kenneth Cole Productions
“Certainly from our standpoint, any tariff is basically a tax on the manufacturer, the retailer and ultimately the consumer. China is not paying for it. We’re looking at the impact of what it does to our existing business and how we address that with our partners and ultimately the consumer. You start to look at holding off on investments or job reductions. There’s a whole slew of things, and it’s going to cost all of us.
Karen Giberson, president and CEO, Accessories Council
“Obviously we’re disappointed. They set up a process for testimony and exclusions, and it was completely disregarded with a series of tweets. If the talks don’t go well in September, we can expect more tariffs. The thing I learned in the last round of testimony, which was quite sobering, is that the impact is much deeper than any one category. Even if you’re shipping from other countries . . . much of the equipment that we buy to make things in the U.S. is made in China. The bummer is the timing of this; holiday is so important for our industry. To think that you could accelerate your shipment in the next four weeks is not realistic for many. I think what we’ve learned is to expect the unexpected and prepare for the worst. There’s no logical system for this.”
Matt Priest, president and CEO, Footwear Distributors and Retailers of America
“We hoped that continued open communication channels between Washington and Beijing would allow time to ease trade tensions and eventually end the tariff threat. It is clear political considerations are outweighing economic common sense, especially as this comes on the heels of a rate drop by the Federal Reserve indicating more challenging economic times ahead. President Trump is, in effect, using American families as a hostage in his trade-war negotiations. Tariffs are taxes, and this move will noticeably raise the cost of shoes at retail and will have a chilling effect on hiring in the footwear industry. We will not take this news lying down. This is one of the largest tax increases in American history, and it is vitally important that we fight this action on behalf of our consumers and our industry.”
Rick Helfenbein, president and CEO, American Apparel & Footwear Association
“Tariffs are taxes on American consumers. The president’s decision to proceed with adding these additional costs for hard-working American families is truly shocking. This decision will increase the tariff bill on all clothes, shoes and home textiles — products that already account for the vast majority of the duties collected by the U.S. government. The fact that this tweet comes after only one meeting with the Chinese delegation following the resumption of talks is extremely concerning. It is time for Congress to step up and take back its authority to manage international trade as outlined under the U.S. Constitution.”
David French, SVP for government relations, National Retail Federation
“As we’ve said repeatedly, we support the administration’s goal of restructuring the U.S.-China trade relationship. We are disappointed the administration is doubling down on a flawed tariff strategy that is already slowing U.S. economic growth, creating uncertainty and discouraging investment. These additional tariffs will only threaten U.S. jobs and raise costs for American families on everyday goods. The tariffs imposed over the past year haven’t worked, and there’s no evidence another tax increase on American businesses and consumers will yield new results.”
Watch the highlights at the 2018 FNAAs.
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