These Shoe Pricing Stats Discredit Trump’s Assertion That China Pays Import Tariffs

President Donald Trump continues to assert that China will pay for increased import tariffs on shoes and other consumer products, but new data proves why that isn’t true.

On Monday, the Office of the U.S. Trade Representative released a list of Chinese imports that could receive a proposed 25% hike in duties, and for the first time, footwear is among the target products. The Trump administration has suggested imposing this increase to pressure China to negotiate on issues of technology transfer, intellectual property and innovation.

The Footwear Distributors and Retailers of America (FDRA) created a chart showing the direct correlation between import price and retail price. “It totally discredits the president’s assertion that the Chinese pay the import tariffs,” said FDRA president and CEO Matt Priest. “Tariffs are a part of the import price and that clearly goes to the American consumer.”

Retail Prices China Tariffs
Retail shoe prices are directly related to import costs. Source: Bureau of Labor Statistics & FDRA analysis of USITC data. * Forecasts.
CREDIT: Sources: Bureau of Labor Statistics & FDRA analysis of USITC data. * Forecasts

FDRA estimates extra annual spending of $131.93 per family on footwear if the threatened tariff hikes go through.

“High footwear tariff rates fall disproportionately on working class individuals and families,” Priest said. “While U.S. tariffs on all consumer goods average just 1.9 percent, they average 11.3 percent for footwear and reach rates as high as 67.5 percent. Adding a 25 percent tax increase on top of these tariffs would mean some working American families could pay a nearly 100 percent duty on their shoes.  This is unfathomable.”

Currently, Trump’s new tariffs are still under review and would not take effect until late June. The administration is accepting comments regarding exemptions until June 10, and public hearings are to be held on June 17. Organizations like FDRA, the American Apparel & Footwear Association and the Sports & Fitness Industry Association have said they will help to negotiate the process in the coming weeks.

Trump continues to make his case on Twitter, his favorite social media platform. “Make your product at home in the USA and there is no tariff,” he tweeted on Wednesday “You can also buy from a non-tariffed country instead of China.”

Priest refuted this argument, noting that making shoes in the U.S. is not viable since about 99 percent of footwear is imported. “China accounts for more than two-thirds of US footwear imports, and virtually no country is ‘non-tariffed’ in supplying footwear to the U.S.,” Priest said. “Plus, the industry is capital-intensive, and production and sourcing chains can’t be reallocated around the globe on a whim.”

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