Fashion may be safe on its face from Donald Trump’s trade war with China, but the U.S. Trade Representative (“USTR”)’s recently-revealed list of imports that will be subjected to tariffs will undoubtedly have an effect on retail in the U.S. Following from the announcement by the USTR that the U.S will impose tariffs on steel and aluminum imports, an additional 1,300 products that make up approximately $50 billion in annual imports from China have been identified as taxable in protest of the nation’s alleged theft of American technology.
As noted by the Associated Press, “The U.S. sanctions are intended to punish China for deploying strong-arm tactics in its drive to become a global technology power. These include pressuring American companies to share technology to gain access to the Chinese market, forcing U.S. firms to license their technology in China on unfavorable terms and even hacking into U.S. companies’ computers to steal trade secrets.”
The goods subject to the most recent round of tariffs are mostly non-consumer products with the exception of things such as dishwashers, televisions and automobile parts. “We are pleased that many everyday products such as clothing and shoes are not on the list,” said Matthew Shay, president of the National Retail Federation, on Tuesday.
That is not to say, however, that imported apparel and footwear is not already subject to tariffs.
In fact, apparel and footwear are two of the most heavily taxed types of products imported into America. Duties on apparel, footwear and other accessories account for more than 22 percent of all tariffs collected by the U.S., with about 33 percent of all clothing and 72 percent of all footwear sold in the U.S. coming from China.
Still yet, even though fashion is not directly targeted by the Trump tariffs, the supply chains tied to the fashion industry are expected to take a hit with effects likely to trickle down to consumers. For instance, machinery used to make footwear or clothing, including textile printers and injection molders for shoes, will be hit with tariffs.
“This will directly raise costs on domestic manufacturers and impact our ability to grow Made in USA,” Rick Helfenbein, chief executive of the American Apparel and Footwear Association, said on Tuesday.
A spokesman for the American Apparel and Footwear Association slammed the tariffs, saying that the duties on machinery will “directly raise costs on domestic manufacturers and [negatively] impact our ability to grow Made in USA.” American-made apparel is already prohibitively expensive for many consumers, especially in comparison to the cost of goods coming out of low-cost apparel manufacturing meccas, such as Bangladesh, Cambodia, Myanmar, and Egypt.