President Donald Trump’s highly anticipated address on trade policy offered little reprieve for industry leaders who have long spoken out about the impact of his threatened and enacted tariffs on American businesses and consumers.
Yesterday at the Economic Club of New York, the United States leader renewed his threats against China and offered scarce details on the “phase one” agreement between the world’s two largest economies, which had been expected to bring to a halt their protracted trade war.
More from Footwear News
- 5 Takeaways From Trump's Trade Speech That Could Impact Businesses
- Stock Market Hopeful Ahead of Trump's Trade Speech
- Melania Trump Wears All-Black in Her Favorite Heels for Veterans Day Parade 2019
While Trump remained steadfast regarding his administration’s stance on trade, organizations, including the American Apparel and Footwear Association, expressed disappointment about the president’s warning that duties on Chinese imports would be “raised very substantially” if no truce was reached.
“American footwear companies and American footwear consumers are already paying too much in tariffs that are injecting costs and uncertainty throughout the economy,” said AAFA EVP Steve Lamar. “It’s time to forge a deal with China, end the tariffs and trade war and get back to the task of creating U.S. jobs, stimulating U.S. investment and fostering U.S. innovation — rather than taxing American companies so they don’t have the resources to pursue those goals.”
In the past year and a half, the U.S. and China have imposed new duties on billions of dollars in items coming from both countries. The first round of the fourth tranche of tariffs took effect on Sept. 1 and introduced a 15% levy on certain Chinese imports — including footwear — to the U.S. China retaliated with duties on U.S. imports that ranged from 5% to 10%.
Just over a month remains before the tariffs on the second round of the fourth tranche is scheduled to take effect on Dec. 15. The 15% levy would affect a wide variety of consumer goods, including footwear, apparel and other accessories.
In mid-October, both countries announced that they had reached a partial trade agreement, with Trump calling it a “substantial deal” that involved pausing the planned tariff increase on Oct. 15, which would’ve boosted to 30% the existing duty of 25% already in place on $250 billion worth of Chinese products. The limited agreement was said to lay the groundwork for a comprehensive deal that Trump and China’s President Xi Jinping were expected to sign at the now-canceled Asia-Pacific Economic Cooperation summit in Chile.
While a location for their meeting has yet to be determined, Trump said in yesterday’s speech that the U.S. and China are “close” to an agreement. “A significant ‘phase one’ trade deal with China could happen,” he added. “[It] could happen soon. But we will only accept a deal if it’s good for the United States and our workers and our great companies because we’ve been hit very hard.”
In the past few weeks, delegates from the U.S. and China have had “serious and constructive” discussions in an effort to secure a deal, Chinese Commerce Ministry spokesperson Gao Feng said on Thursday. China also announced that the two countries had reached an agreement to roll back tariffs scheduled to take effect next month. However, on Friday, Trump denied that he had agreed to curtail duties.
In a statement to FN, the NRF’s VP for supply chain and customs policy, Jon Gold, wrote, “We continue to call on the administration to engage in trade policy that stimulates growth and economic prosperity for U.S. businesses, workers and consumers. While our trading partners must play by the rules, we need to work with our allies to ensure this happens. We advocate for a trade deal with China that not only addresses the systemic issues, but also removes all of the harmful tariffs that are unnecessarily taxing U.S. companies and consumers.”
Despite the uncertainty surrounding trade, some businesses remain hopeful that Trump and Xi are nearing a deal — whether it means removing existing tariffs in the so-called “phase one” agreement or canceling altogether the duties set to take effect next month.
“The general atmosphere is somewhat of optimism in the sense that our sources are telling us the president is motivated to get a deal done [and] China is motivated as well,” Matt Priest, president and CEO of the Footwear Distributors and Retailers of America, told FN. “You haven’t seen anyone in the press say that if there’s a ‘phase one’ deal, that [the second round of the fourth tranche of tariffs] would still go into effect. I think there’s been a consensus, even among some of the trade hawks, that this would be null and void if there’s an agreement. The big question is how they view [the first round of the fourth tranche] and what they end up doing with that in a ‘phase one’ deal.”
5 Takeaways From Trump’s Trade Speech That Could Impact Businesses
With APEC Summit Canceled, Trump-Xi Trade Meeting Hangs in the Balance