More than 100,000 jobs in the footwear industry have already been lost as the coronavirus crushes the United States economy. Now, trade leaders are seeking an extension to the government’s duty deferment plan, which they said could help prevent even more workforce casualties.
In a letter addressed to the Customs and Border Protection and the Treasury Department, the Footwear Distributors and Retailers of America urged the Trump administration to postpone the payment of import taxes and fees for the rest of the year.
Deferring duties, according to the trade group, is an “easy way” to ensure that footwear companies stay liquid and retain workers at a time when funds are increasingly running low amid the COVID-19 health crisis.
“This would free up much-needed capital to help U.S. footwear companies stay in business and preserve U.S. jobs,” president and CEO Matt Priest wrote in a statement to FN. “These duties would still be paid — just at a later date — so there is no loss to the federal government.”
April marked the worst month for the U.S. labor force since the government began tracking the data at the start of the Second World War. According to the Labor Department, employers lost more than 20.5 million jobs last month, and the unemployment rate spiked to 14.7%, as scores of stores, offices and businesses closed their doors for weeks. Many nonessential employers were forced to lay off or furlough their workers, leading more than 33 million people to file for unemployment benefits since mid-March.
Last month, President Donald Trump allowed American businesses to delay their payments on a range of import tariffs in a bid to boost the economy. The 90-day delay was extended to importers who have suffered “significant financial hardship” during the outbreak but fell short of an elimination of duties sought by trade organizations and retailers.
In a survey, the FDRA reported that 70% of footwear executives expect sales to drop 20% to 40% in 2020. What’s more, those surveyed indicated that it could take six months or more for businesses to get back to normal supply chain operations.
“Strengthening our footwear companies during this difficult time is vital to our workers, their families and the communities they support,” Priest added. “We hope everything is on the table to save our economy.”