JCPenney is not holding back in its opposition to President Donald Trump’s newest round of proposed tariffs on Chinese imports.
The department store chain is among a list of at least a couple hundred footwear and apparel retailers that have either submitted letters to the Office of the United States Trade Representative (USTR) and/or are testifying before the group in Washington D.C. this week. The companies are looking to dispute Trump’s proposed 25% levy — dubbed the “fourth tranche” of tariffs or “List 4” — on $300 billion worth of Chinese goods. (This round of tariffs is part of a year-long trade dispute between the United States and China that has already seen the U.S. slap new levies on $200 billion in Chinese imports. China responded with tariffs on $60 billion in U.S. imports.)
“There can be little doubt that imposing tariffs on apparel, footwear, and household goods would cause economic harm to U.S. consumers,” the company said in its written testimony, part of seven-day hearing taking place in the nation’s capital since Monday. “Indeed, List 4 includes a proposed tariff on Christmas ornaments. For goodness sakes, a tax on Christmas ornaments? One wouldn’t think the Administration would seek to emulate the Grinch, who left little Cindy-Lou Who with walls devoid of ornaments and ‘nothing but hooks and some wire.’ ”
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While the Plano, Texas-based retailer’s comments offer a unique analogy for the Trump administration’s trade policy, they are markedly in line with much of the retail industry’s response to the commander in chief’s use of threatened and enacted tariffs.
In its letter to USTR, Macy’s Inc. pointed out that the fourth tranche of tariffs — which will hit a large range of Chinese imports including footwear, apparel and other accessories — will have a significant impact on American families, particularly during the upcoming back-to-school period.
“Families who shop at Macy’s should not be required to face potential tax increases on back-to-school shoes, sweaters and pullovers for the fall, or, for that matter, on baby clothes,” the firm wrote. “It is hard enough for new parents to make ends meet while changing diapers and surviving on a few hours of sleep. Is it really a good idea to impose new taxes on baby clothes?”
JCPenney, meanwhile, called out a “striking” and “disproportionate impact” of the proposed List 4 tariffs on women.
“JCPenney’s core customer is a working, middle-class adult female who shops for her family on a household income marginally higher than the U.S. median income level,” JCPenney stated. “She can’t afford tax increases on back-to-school shoes for her family, on raincoats or on curtains for the home — or, for that matter, on Christmas ornaments.”
The department stores — which are already wading through a series of retail disrupters, such as the larger consumer shift toward digital as well as experiential spending — join shoe brands, such as Steve Madden, New Balance and Marc Fisher Footwear LLC, which have submitted similar comments urging the administration not to move forward with the new levies. They all cited insurmountable challenges for consumers, who, they said, will have to absorb new levies by paying more for their goods, as well as widespread layoffs and unwarranted pressures on global supply chains.
“I have had dozens of conversations with footwear executives who have told me point blank that, if this proposal goes through, prices will go up, jobs will be lost and capital investments made here in the United States will come to a screeching halt,” said Footwear Distributors Retailers of America president and CEO Matt Priest in his written testimony. “The numbers that our members are giving us in terms of increased tariff costs on their companies are staggering, making this one of the largest proposed tax increases in American history.”
Like JCPenney, Priest also noted that new tariffs could hit women the hardest.
“[Women’s fashion] is one of the biggest parts of our industry that’s under threat because they are most predominantly in China,” he noted. “China has provided the opportunity for fashionable women’s shoes to get to U.S. consumers at high quality and affordable prices.”