Industry Reacts to Trump’s Threatened $100B Tariffs; Stock Market Dives on Uncertainty

In What's New, Industry News by Lauren Parker, Accessories Magazine

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The footwear, apparel, footwear, travel goods and related products dodged a bullet when Trump announced that they would be exempt from the initial wave of 1,300 tariff lines and $50 billion worth of imported goods from China. However, the president’s latest threats to impose $100B more tariffs on Chinese goods puts footwear and other consumer goods back into the crosshairs. Of course there is the chance that the president will change tactics, or is playing hardball, but such uncertainty isn’t helping consumer confidence, or the stock market (the Dow dove down 700 points today on trade war fears).

“The ratcheting up of trade tensions clearly carries risks. The tariff threats, even if only intended as bargaining tools, will be difficult to back down from if talks fail to deliver results,” Capital Economics’ Julian Evans-Pritchard wrote in a research note Friday.

On March 18, the American Apparel and Footwear Association had already joined with more than 40 other associations and drafted a letter urging Trump to not impose new tariffs on U.S. imports from China. Today, the AAFA President and CEO Rick Helfenbein had this to say about the proposed $100B in additional tariffs:

“It is time to wake up – we are being marched into a trade war and the losers will be American workers, American consumers, and the American economy. The decision to consider an additional $100 billion is far from ‘appropriate.’ Tariffs are hidden, regressive taxes paid for by hardworking American families and result in lost American jobs, higher prices, and damage to the American economy, plain and simple. Additional tariffs only add fuel to the fire and create an environment of one-upmanship that will not solve the problem we are trying to fix. We cannot treat this like a school yard fight. This is a fight where everyone loses.

“We encourage the administration to focus on the problem at hand, to work with our international allies to fix the problem, and not take this out on American workers and American consumers. Additional tariffs will not fix this problem and are not an ‘appropriate’ response.”

Matt Priest, president and CEO of the Footwear Distributors & Retailers of America (FDRA) issued the following statement in response:

“We simply cannot understand why the President would use American footwear consumers as a bargaining chip in his fight with China.  We have stressed that adding tariffs will drive up shoe prices for American consumers.  Now we are also worried that these latest comments will cause a drop in consumer confidence, pulling back dollars that Americans might have used to purchase shoes this Spring.  Fear and confusion leads to pauses in spending, and footwear retailers cannot afford this in an already tough environment.  We encourage the President to pull back from his latest comments for the sake of footwear shoppers and retailers.”

Priest added: “The first tariffs targeting $50 billion in goods was sold as placing a minimal burden on American families. There is no chance adding additional tariffs on another $100 billion in trade can prevent families from seeing cost increases on everyday goods, as well as job losses starting with agriculture and moving across much of our economy including footwear.”

An infographic from the FDRA shows that “outdated footwear duties” already place too much of a burden on consumers and the American footwear industry.

Source: FDRA

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