President Donald Trump’s plan to impose steep tariffs on steel and aluminum imports sent shock waves throughout the global business community as countries began to prepare for a possible trade war with America.
And a report yesterday from Bloomberg suggests the administration is also considering a new set of measures targeting China. The proposed duties are intended to punish China for intellectual property abuses and could affect a range of industries — including footwear, which imports about 72 percent of its products from China.
The president’s plans have sparked significant backlash. The latest fallout from the proposal involves his own top economic adviser, Gary Cohn, who said on Tuesday he would resign his position as head of the National Economic Council. According to reports, Cohn is a free-trade advocate and has chosen to leave the administration after losing the fight against the tariffs.
Cohn is not alone in his opposition. Senators from the president’s own party, including Sen. Jeff Flake (R-Ariz.) and Sen. Mike Lee (R-Utah), have voiced their displeasure and are crafting legislation that would require congressional approval for Trump’s trade actions.
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Trump’s initial proposal involved imposing tariffs of 25 percent on imports of steel and 10 percent on those of aluminum, a move he asserted would provide protection for American industrial workers.
Secretary of Commerce Wilbur Ross has attempted to quell fears about an economic fallout, claiming that the steel tariffs would have no significant negative impact on consumers. However, a report released March 5 by The Trade Partnership, a nonpartisan pro-trade group, estimates that move could lead to a net loss of nearly 146,000 jobs in the U.S.
By its estimates, the country’s iron, steel and aluminum industries could see an increase of 33,464 jobs, but roughly 179,334 jobs would potentially be lost in other industries that would be affected by a rise in the cost of materials.
And that’s just measuring the direct impact of the tariffs, explained Steve Lamar, EVP of the American Apparel & Footwear Association. “Anytime you impose these tariffs, they have ripple effects on the economy,” he said. “There are the self-inflicted wounds that we do to our own economy, and then there’s the damage that other countries will do to us.”
Lamar added, “If other countries see us do this, they will retaliate. You could see them take steps that might target American brands in their markets.”
Representatives from the European Union have already named several potential targets for punitive measures. A list drawn up by the European Commission (and obtained by Bloomberg News) targets $3.5 billion in annual imports from the States, including $1.2 billion worth of consumer goods, such as shirts, jeans, cosmetics, motorbikes and pleasure boats.
Matt Priest, president and CEO of the Footwear Distributors & Retailers of America, told FN, “In regard to retaliation on U.S. footwear exports, we have less exposure because we don’t export a large amount of product to the European market. But if the Trump administration decides to impose increased tariffs on imports from China, that will have a dramatic impact on the footwear industry and drive up prices on consumer goods.”
Priest added, “Our broader concern is the consumer. If the economy goes south because of these actions, that’s going to hurt us. If there’s less disposable income, there’s less income for families to go out and buy footwear or anything else.”
Few details are available regarding the president’s plans for China imports. More information is expected in the coming weeks, following a Section 301 investigation by the U.S. Trade Representative’s Office on China’s IP practices.
Note: This article has been updated to correct the percent of footwear imports from China.
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