On the eve of Election Day 2020, executives from the American Apparel and Footwear Association and the Footwear Distributors and Retailers of America outlined the concerns that are top of mind for footwear businesses, as well as the issues that continue to impact consumer spending in an unprecedented election year marred by a global pandemic, nationwide civil unrest and historically high unemployment levels.
“The first order of business is curing COVID-19 and sustaining the economy until it can sustain itself by passing stimulus and COVID-19 relief,” explained AAFA president and CEO Steve Lamar. “Looking long term, we need trade policy that is grounded in predictability and process, and which provides a way out of the crushing tariff burden that U.S. shoe companies, U.S. shoe workers and U.S. shoe lovers currently pay.”
Over the past four years, tariffs have been a significant focus for President Donald Trump, who has promised to resurrect U.S. manufacturing by slapping steep tariffs on foreign competitors, particularly China. In mid-January, Washington and Beijing struck a truce through a so-called “phase one” agreement that addressed intellectual property protection and included a commitment from China to purchase more U.S. goods.
While the deal effectively eased nearly two years of tensions between the world’s two largest economies, at the time, U.S. officials said that duties already implemented on hundreds of billions of dollars in Chinese products — including some consumer goods like apparel, footwear and accessories — would remain in place until a “phase two” deal is reached. (A timeline for that was not revealed.)
When it comes to the much-anticipated stimulus deal, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have been unable to secure a followup package to the CARES Act, which was enacted in late March.
It comes at a precarious time for the United States, which reported 99,321 new coronavirus cases on Friday — the highest single-day tally recorded for any country. A surge in the number of infections have led to concerns over renewed lockdowns that could force nonessential businesses to close their doors once again and potentially push more workers into joblessness. FDRA president and CEO Matt Priest echoed sentiments shared by fashion and retail CEOs, including Walmart chief Doug McMillon and Steve Madden CEO Ed Rosenfeld, who have urged the current administration to move quickly in passing a stimulus package, which could boost consumer spending and help reinvigorate retail sales.
“We need to ensure that people have unemployment benefits, that stimulus is flowing into the hands of our citizens — particularly if we have to do more shutdown protocol — and see that there’s access to loans [as well as] the ability to deduct or defer taxes and other interest on investments,” said Priest.
He added, “In spite of some of the challenges, the government was able to deploy massive amounts of capital very quickly, and my hope is that they can do that again sooner rather than later … so we can start to build more certainty for companies to invest, strategize and make decisions on what’s best for their businesses.”