Members of the Outdoor Industry Association (OIA) took to Capitol Hill this week, cautioning lawmakers about what they say is an increasingly negative impact of President Donald Trump’s tariffs on American businesses, jobs and consumers.
Columbia Sportswear Co., VF Corp., Nemo Equipment and Nester Hosiery were among the companies that represented the $400 million sector, lamenting the roughly $1.8 billion more in duties that outdoor recreation firms have had to pay over the last 10 to 11 months (from September 2018 through July 2019). That’s nearly triple the amount the companies paid the previous year, according to recently released OIA data.
In a statement, the trade group’s VP of government affairs, Patricia Rojas-Ungar, expressed alarm that manufacturers and retailers were holding off on filling jobs and expanding their facilities due to the strain of additional levies.
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“The punitive tariff payments are essentially new taxes on American businesses and consumers, forcing American companies to halt new hiring, close new product lines and absorb these unexpected costs wherever they can,” she said. “The cushion is now essentially gone.”
According to the Bureau of Economic Analysis, the outdoor recreation economy represents $412 billion, or 2.2%, of the country’s GDP. The sector itself is estimated to generate $887 billion in annual consumer spending; it also supports 7.6 million American jobs and pays an accumulated $65.3 billion in federal taxes.
Since the start of the trade war between the United States and China, the industry has coughed up nearly three times the number of tariffs on outdoor products hit with Section 301 tariffs, paying a total of $2.8 billion. If it continues to drag on, added Rojas-Ungar, companies may be forced to eliminate products, cut jobs or even go out of business.
Over the past year and a half, since Trump initiated a financial dispute with China, his administration has launched four tranches of tariffs, grouping together various products, materials and components to be hit with new levies.
Trade war tensions relaxed on Wednesday following Trump’s decision to delay increased tariffs on $250 billion worth of Chinese goods — representing the combined first three tranches, none of which included shoes — as a “measure of goodwill” during the celebration of the 70th anniversary of the founding of the People’s Republic of China. The 5% duty increase, originally scheduled to take effect on Oct. 1, will now be imposed on Oct. 15.
Meanwhile, the implementation of the fourth tranche of tariffs, which would impact $300 billion in Chinese imports — including footwear, apparel and other accessories — has been spread out across two dates. On Sept. 1, Washington hit Beijing with a 15% levy on $112 billion worth of those goods. China responded by slapping American products with new duties that range from 5% to 10%. Tariffs on the remaining $188 billion will be implemented on Dec. 15.
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