As Democrats appear to be on the brink of taking control of the Senate from Republicans, shoe industry leaders are opening up about the agenda items they want the new Congress to tackle heading into 2021.
This morning, reports emerged of Democrat Rev. Raphael Warnock’s victory over incumbent Republican Sen. Kelly Loeffler, while Democrat Jon Ossoff extended his lead over Sen. David Perdue in Georgia’s runoff elections. (The result of the latter race is still too close to call.) If Perdue wins, Republicans will retain their hold on the Senate 51-49. If Ossoff wins, Democrats will gain control, with Vice President-elect Kamala Harris acting as the tiebreaker for future votes.
With 14 days left until Inauguration Day, top executives from the Footwear Distributors and Retailers of America and the American Apparel and Footwear Association share what’s top of mind for the fashion and footwear sectors this year.
Watch on FN
Early last week, President Donald Trump enacted a sweeping COVID-19 relief package approved by Congress that includes $600 in direct payments to individuals as well as an additional $300 a week for the unemployed. The funds have already begun to hit Americans’ bank accounts; however, some lament that the money, which is only half of the $1,200 distributed as part of the CARES Act, isn’t enough to sustain U.S. families.
Many people have expressed optimism that another round of payments could be expected after President-elect Joe Biden, who promised to advocate for more checks, is sworn in on Jan. 20. Additional stimulus also hinges on the results of the runoff elections in Georgia: Before he signed the $900 billion stimulus measure into law, Trump pushed for $2,000 checks, which got the green light from the Democratic-led House of Representatives but was ultimately blocked by Senate Republicans.
“With the results looking like both Warnock and Ossoff winning their seats, the Democrats will take control of the Senate. That sets up quick action on additional stimulus in the coming weeks with both a majority of Democrat lawmakers and Republicans supporting additional measures,” said FDRA president and CEO Matt Priest. “When additional cash is infused into the American economy, it inevitably drives increased shoe sales and supports American jobs.”
At the start of the year, the U.S. saw the expiration of tariff reductions under the Miscellaneous Tariff Bill, which temporarily suspends or reduces import taxes on products with zero or little domestic availability. Thousands of goods immediately faced increased duties or were prevented from receiving reductions on levies, even though they were recommended for tariff relief when the International Trade Commission filed its MTB report to the House Ways and Means Committee and Senate Finance Committee in August.
“We’re clearly articulating the need to cease trade policy that is ruled by tariffs and look to a Biden administration to support smart trading relationships with our global trading partners such as Vietnam,” said AAFA SVP of policy Nate Herman. He also called for the retroactive renewal of both the Generalized System of Preferences, which provides duty-free treatment to certain goods coming from designated beneficiary countries, as well as the MTB.
As the coronavirus pandemic drives price-conscious consumers to seek deep discounts, tariffs continue to push supply chains costs higher for brands. Dozens of business leaders have expressed that they have tighter margins than ever before, and experts forecast that the surge in import costs could lead to fewer companies selling footwear and less innovation in the marketplace.
With the possibility of the new Senate ending up in a 50-50 split, “the environment won’t be conducive for major legislative initiatives, but our hope is that lawmakers will focus in on moving critical trade measures such as the Miscellaneous Tariff Bill and work with the Biden administration to reduce the punitive tariffs put in place by the Trump administration,” Priest added. “That may take some time, but we’re hopeful there will be champions of the American footwear industry both in Congress and the Biden administration.”
Human rights protection
Over the past year, a number of trade associations and nonprofits have pressed for change or taken measures aimed at preventing labor abuse as pressure continues to mount over the alleged forced labor of the Uyghur people in Chinese factories. In September, the AAFA testified as part of the House Ways and Means, Trade subcommittee hearing on “Enforcing the Ban on Imports Produced by Forced Labor in Xinjiang,” calling for stronger protections for workers, payment of unpaid overtime and severance, plus safer working conditions.
“We seek U.S. government support in partnering with our industry and taking a leadership role in collaborative efforts to combat forced labor and a larger system of oppression taking place in China’s Xinjiang Uyghur Autonomous Region,” Herman told FN today.
Last year, the AAFA, FDRA and more retail organizations appealed to American business leaders to establish a multi-stakeholder working group to tackle the issue. A coalition of more than 180 human rights groups also came together last summer to establish the End Uyghur Forced Labour initiative that urged companies to cease sourcing textiles from the XUAR region as well as to cut ties with any suppliers in China who benefit from forced labor.