USFIA Statement on Potential 301 Tariffs – Letters to U.S. President Donald Trump

USFIA Statement on Potential 301 Tariffs

The threat to fashion brands and retailers—and the consumers who love them—heightens as the Trump Administration considers new tariffs on products from China, which could potentially include clothing, shoes, accessories, and home textiles.

The United States Fashion Industry Association (USFIA) has joined with business groups in many sectors, including fashion, footwear, retail, and tech, in sending letters to President Donald Trump urging him to reconsider the expected broad-based remedy tariffs under Section 301 of the Trade Act of 1974.

In case we were not clear the first time, while we support efforts to protect the intellectual property of brands and retailers, we will never support punitive tariffs based on the fiction that imports harm domestic jobs and growth. These new tariffs will not create more jobs in the United States, but instead, will harm the companies that already create thousands upon thousands of high-quality jobs in design, in marketing, in retail, in logistics, in compliance, right here in the United States.

And these tariffs will absolutely harm American consumers, who will face higher prices on the clothes, shoes, home products, and other essentials.

To reiterate, tariffs are not the way to support American companies and jobs, and definitely not the way to participate in the global economy. We urge the Trump Administration to consider the implications of these tariffs, and at the very least, consult with American brands and retailers before taking this egregious step.

The two letters to President Donald Trump:

 

 

March 18, 2018

Dear President Trump,

As representatives of the U.S. business community, we continue to have serious concerns regarding China’s trade policies and practices, including market access barriers and state- directed investment policies, technology transfer and data localization mandates, policies and practices that prevent setting market-based terms in licensing and technology-related negotiations, and theft of trade secrets and other intellectual property. These persistent problems jeopardize U.S. global competitiveness, innovation, productivity, and cybersecurity. We recognize the U.S. Government’s examination of these issues through the 301 process, and support an effort to address China’s discriminatory practices.

However, we urge the Administration to take measured, commercially meaningful actions consistent with international obligations that benefit U.S. exporters, importers, and investors, rather than penalize the American consumer and jeopardize recent gains in American competitiveness.

The imposition of sweeping tariffs would trigger a chain reaction of negative consequences for the U.S. economy, provoking retaliation; stifling U.S. agriculture, goods, and services exports; and raising costs for businesses and consumers. The Administration should not respond to unfair Chinese practices and policies by imposing tariffs or other measures that will harm U.S. companies, workers, farmers, ranchers, consumers, and investors.

Tariffs would be particularly harmful.

  • Tariffs on electronics, apparel, and other consumer products would increase prices for U.S. consumers and businesses, while doing little to address the fundamental challenges posed by unfair and discriminatory Chinese trade practices. These increased costs would effectively levy a tax on U.S. consumers and businesses, negating gains for American workers from U.S. tax reform.
  • Tariffs would not only affect Chinese shippers but also harm U.S. companies that sell component pieces of final products exported from China.
  • Tariffs would harm community service providers—including American health care, education, and emergency responders. These essential services rely heavily on consumer electronics and other imported goods, and would be negatively affected by increased costs.
  • Tariffs on product components would hurt U.S. manufacturing exports by making it more expensive to obtain key inputs and disrupting existing supply chains. This would have a negative impact on American jobs. In 2017, manufactured goods made up more than 85 percent of U.S. exported goods, totalling USD 1.3 trillion.
  • Tariffs that result in reduced consumption of products would also depress financial markets—a decline in ICT product purchases alone could result in a potential decrease of GDP by USD 11 billion for every percentage of stock value lost.

There are alternatives to address China’s policies and practices that would not have the same adverse impacts on U.S. consumers, businesses, and local communities or undermine the benefits of the tax reform. In particular, it is critically important that the Administration work with like-minded partners to address common concerns with China’s trade and investment policies. Imposition of unilateral tariffs by the Administration would only serve to split the United States from its allies, hinder joint action to effectively address shared challenges, and ensure that foreign companies take the place of markets that American companies, farmers and ranchers must vacate when China retaliates against U.S. tariffs.

We urge the Administration not to impose tariffs and to work with the business community to find an effective, but measured, solution to China’s protectionist trade policies and practices that protects American jobs and competitiveness. Consistent with Section 304 of the Trade Act of 1974, we request that the Administration allow industry experts the opportunity to comment on these issues, including the economic impact of any potential actions.

Sincerely,

Agriculture Transportation Coalition Airforwarders Association

Allied for Startups

American Apparel & Footwear Association AutoCare Association

CAWA Auto Parts

Coalition of New England Companies for Trade Columbia River Customs & Forwarders CompTIA

Computer and Communications Industry Association Consumer Technology Association (CTA)

Customs Brokers and Forwarders Association of Northern California Developers Alliance

Fashion Accessory Shippers (FASA) Gemini Shippers Association Grocery Manufacturers Association Home Furnishings Association

Information Technology Industry Council (ITI)

International Wood Products Association Internet Association

Los Angeles Customs Brokers

National Customs Brokers and Forwarders Association of America National Foreign Trade Council

National Retail Federation

NY/NJ Forwarders and Brokers Association North American Meat Institute

Outdoor Industry Association

Pacific Northwest Asia Shippers Association Promotional Products Association International Retail Industry Leaders Association (RILA) Snowsports Industries America

Specialty Crop Trade Council Sports and Fitness Industry

Tea Association of the U.S.A., Inc. TechNet

Telecommunications Industry Association (TIA) The APP Association (ACT)

The Pacific Coast Council of Customs Brokers and Freight Forwarders The Toy Association

Travel Goods Association (TGA)

U.S. Chamber of Commerce

U.S. Council for International Business

U.S. Fashion Industry Association

U.S. Hide, Skin, and Leather Association Wine and Spirits Shippers Association

 

CC:         U.S. Trade Representative Robert Lighthizer Secretary of Commerce Wilbur Ross Secretary of Treasury Steve Mnuchin

National Economic Council Director Larry Kudlow

 

The President

The White House

1600 Pennsylvania Avenue, N.W. Washington, DC 20500

March 20, 2018

Dear Mr. President,

We are writing to express our very strong opposition to any tariff increases on U.S. imports of consumer products, such as clothing, shoes, home goods, fashion accessories, or travel goods from China. Such tariff increases would hurt U.S. consumers, U.S. workers, and U.S. companies, and would not address the underlying concerns regarding illegal technology transfer and intellectual property rights theft in China.

Please consider the following:

The United States already imposes a significant border tax on these products. Average tariff rates on most of these products range from 10.8% to 14.2%, even though the average rate the U.S. imposes on all products is less than 1.4%. Some tariffs are extraordinarily high. For example, ski jackets, baby garments, and tennis shoes face U.S. duties as high as 27.7 %, 32 %, and 67.5 %, respectively. We impose these tariff rates – originally set during the early days of the Great Depression – even though there is very little or no commercial production of these items in the United States.

China is the top supplier of these items to the United States – by far. In 2017, China accounted for about 41 % of all apparel, 72 % of all footwear, and 84 % of all travel goods imported into the United States. Because duty rates in these product categories are so high and because China is such a dominant supplier, U.S. imports from China already account for most of duties collected by the U.S.

Government. In fact, duties on U.S. imports of these consumer products from China already represent more than 22 % of all tariffs the U.S. collects from all countries on all products. And, to be clear, such duties are paid by U.S. workers, U.S. consumers, and U.S. companies – not China.

Imposing additional tariffs on U.S. imports from China will raise the price of these articles in the United States. China’s dominance, plus the fact that every American buys these consumer goods, means that every American will feel the adverse effect of this action. At a 25 % additional duty rate, we estimate that a family of four will end up paying about USD 500 more to buy these basic consumer products every year, and this doesn’t account for any price increases that other suppliers will surely charge as they respond to the cost increases. Of course, Americans may balk at those price increases and purchase less, especially lower income Americans who would bear the brunt of this regressive tax. But fewer purchases would only shift the harm to another part of the economy – the jobs of the more than four million Americans currently employed in the U.S. apparel, footwear, travel goods, and home goods industries.

Mr. President, last year you signed into law a sweeping tax cut that will reduce the taxes paid by many Americans and position our country for unparalleled economic growth. We are concerned that many of those gains could be eliminated through the inflationary and job‐destroying effects of these new tariffs, undermining your pro‐growth agenda that benefits American workers and their families.

While we share many of your concerns on the underlying problems in China, we urge you to find and implement remedies that address those problems rather than cause economic damage to U.S. citizens.

Sincerely,

 

American Apparel & Footwear Association (AAFA) American Import Shippers Association (AISA) California Fashion Association (CFA)

Council of Fashion Designers of America (CFDA) Fashion Accessories Shippers Association (FASA) Footwear Distributors & Retailers of America (FDRA) Gemini Shippers Association

Halloween Industry Association (HIA)

Juvenile Products Manufacturers Association (JPMA)

North American Association of Uniform Manufacturers and Distributors (NAUMD) National Retail Federation (NRF)

Outdoor Industry Association (OIA)

Promotion Products Association International (PPAI) Retail Industry Leaders Association (RILA)

Sports and Fitness Industry Association (SFIA) Travel Goods Association (TGA)

U.S.        Fashion Industry Association (USFIA)

 

www.usfashionindustry.com