Companies including New Balance Athletics Inc., VF Corp., Shoe Carnival Inc. and Wolverine World Wide Inc. plan to make their case against the proposed 25% duties on $300 billion worth of imports that they say can harm the United States economy and lead to widespread worker layoffs, as well as increase prices for American consumers.
Starting today until Tuesday next week, the Office of the U.S. Trade Representative is allowing public commentary on the fourth tranche of tariffs on Chinese products, which would affect footwear, apparel and other accessories. The tariffs, according to the USTR, come in response to China’s purported unfair trade practices related to technology transfer and the alleged theft of intellectual property.
Ahead of the seven-day hearing, Shoe Carnival president and CEO Clifton Sifford addressed U.S. Trade Representative Robert Lighthizer in a letter: “Such a substantial tariff increase would inevitably result in higher prices for our customers, who are hardworking, moderate-income consumers on a budget. In short, this onerous change in tariffs will hurt the very people that can least afford it and breaks a promise the current administration made to ‘Make America Great Again,'” he wrote.
Even Boston-based New Balance, which has previously backed Trump’s trade policies, submitted a letter to the USTR. Monica Gorman, VP of responsible leadership and global compliance, wrote that the additional tariffs “will risk our company’s overall financial health, which will, in turn, limit our ability to maintain and reinvest in our American factories.” (When it comes to domestic manufacturing, the footwear brand is an outlier among its peers, producing more than four million pairs of athletic shoes in the U.S. each year — although those releases account for a small portion of its overall business.)
Another memo penned by Ralph Lauren Corp. called for the removal of shoes and clothing from the list, citing lower sales and job losses. “We strongly oppose the imposition of additional tariffs,” wrote president and CEO Patrice Louvet. Additionally, Clarks Americas Inc. President Gary Champion said the proposed tariffs “would also have a major negative impact on our business, likely resulting in Clarks store closures in the U.S., for example. The decision to implement these tariffs would have an immediate and lasting impact on our consumers, our employees and our overall business.”
Existing duties for footwear imports average 11% and go up to 67.5%, according to the Footwear Distributors and Retailers of America. Major shoe brands, from Adidas to Steve Madden, have already begun shifting some of their production to Vietnam and other neighboring countries as labor costs in China rise amid trade war uncertainties. (Trump still claims that China will bear the costs for import tariffs on consumer products.)
This marks the fourth round of hearings following the three tranches of tariffs already enacted by the White House. Negotiations between the United States and China faltered last month, with Trump ordering a hike of 10% to 25% on $200 billion worth of Chinese imports. In retaliation, the latter slapped duties of 5% to 25% on $60 billion in U.S. goods.
On Friday, more than 600 companies — including athletic retailer Puma North America, department store chain Macy’s Inc. and designer Alexander Wang — sent a letter urging the president to return to the bargaining table and reach an agreement between the world’s two largest economies.
“An escalated trade war is not in the country’s best interest, and both sides will lose,” the letter ended. “We are counting on you to force a positive resolution that removes the current tariffs, fosters American competitiveness, grows our economy and protects our workers and customers.”
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