‘This is unfathomable’: American shoe brands unite against Trump
More than 170 footwear companies signed a letter sent to President Trump urging him to not go ahead with extra tariffs on $300 billion of Chinese goods. The letter was signed by footwear industry heavyweights such as Nike (NKE), Adidas (ADDYY) Crocs (CROX), and Under Armour (UA) among others.
“As leading American footwear companies, brands and retailers, with hundreds of thousands of employees across the U.S., we write to ask that you immediately remove footwear from the most recent Section 301 list published by the United States Trade Representative on May 13, 2019. The proposed additional tariff of 25 percent on footwear would be catastrophic for our consumers, our companies, and the American economy as a whole,” the letter states.
Trump raising tariffs on $200 billion on Chinese goods on May 10 has further stoked the flames of the trade war between the U.S. and China. Shortly after China retaliated with tariffs on $60 billion of American goods, set to take effect on June 1.
The escalation of tensions has sparked debate around the world about the effectiveness of the tariffs and called into question who ultimately will pay the tariffs — companies or consumers.
The Footwear Distributors and Retailers of America (FDRA) argues that additional tariffs on footwear will hurt the American consumer, especially those who shop at retailers such as Walmart (WMT) and Target (TGT) since brands sold at those retailers rely heavily on Chinese manufacturing.
“High footwear tariff rates fall disproportionately on working class individuals and families. 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,” the letter continued.
An estimated 72% of footwear and 84% of travel goods are produced in China, and footwear is one of the highest duty products in the marketplace today, according to FDRA president and CEO Matt Priest.
However, one company that did not participate in the letter was New Balance — a company that manufactures a portion of its shoes in the United States. The New England-headquartered company came under fire in 2016 when a quote from a then New Balance executive was seen as an endorsement for Trump.
Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.
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