As the trade conflict between the U.S. and China intensifies, the markets continue to evidence investors’ anxiety — starting the trading day Wednesday in the red across the three major U.S. indexes.
As of 11 a.m., the Dow Jones Industrial Average remained down 237 points to 23,796, the Nasdaq slid 50 points to 6,891, and the S&P 500 lost 16 points to 2,958. (The Dow had opened down nearly 500 points.)
The market reaction comes on the heels of China’s overnight announcement that it would impose tariffs on 106 types of American imports, including whiskey, soybeans, cars and chemical products — amounting to $50 billion in U.S. products annually.
That news came just hours after the Trump administration firmed up its plans to impose an additional 25 percent tariff on $50 billion worth of Chinese goods — revealing a list of about 1,300 items including industrial technology and medical devices, as well as steel and aluminum.
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Footwear and apparel stakeholders had been breathing a sigh of relief after the White House released the list yesterday, which did not target either industry with any direct levies — although it does include some imported machinery used to manufacture footwear.
“I’m so proud of the effort that footwear companies, executives, employees and FDRA staff put forward to help keep footwear off President Trump’s new tariff target list,” said Matt Priest, president and CEO of the Footwear Distributors & Retailers of America, which spearheaded the shoe industry’s efforts to combat additional tariffs. “Including footwear on the list was a very real and substantial threat to footwear workers and consumers across the country, and we are very pleased that we can take a deep sigh of relief.”
When reports surfaced last month that President Donald Trump planned to impose sweeping tariffs on imports from China, 82 footwear retailers, including Nike, Wolverine Worldwide and Clarks, sent a letter to the White House expressing “strong concern.”
(The U.S. footwear industry would have been among the sectors with the most to lose should the additional tariffs have included it; more than 71 percent of the shoes the U.S. imports come from China.)
“U.S. footwear imports already face astronomically high tariff rates that fall disproportionately on working-class individuals and families,” the letter stated. “While U.S. tariffs on all consumer goods average just 1.3 percent, they average 11 percent for footwear and reach rates as high as 67.5 percent. In 2017 alone, U.S. footwear companies and U.S. consumers paid nearly $3 billion in these hidden taxes. This amounts to billions upon billions of dollars paid since these tariffs were first enacted in the 1930s. U.S. footwear tariffs stifle innovation and job creation and raise the cost of shoes for every American.”
Similarly, retailers such as Walmart, Macy’s and Levi’s also sent a letter to the White House expressing fears that new China tariffs would result in undue harm.
Nevertheless, Trump moved forward, signing the order on March 22 to impose as much as $60 billion in levies against China.
Despite footwear and apparel being fairly unscathed in any direct way by the new levies, experts contend that a looming trade war is likely to have wide-ranging affects across multiple industries and the American economy as a whole.