China tariffs hit Americans where it hurts: right in the sneakers

China tariffs hit Americans where it hurts: right in the sneakers
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After giving us generous tax cuts, one would think that the White House would back off and not ask hard-working Americans to add more revenue to the federal coffers. However, realizing that their tax plan was flawed, Trump officials probably conspired to have us pay more for clothes and footwear from China just to help adjust the bill.

Since 41 percent of our apparel and 74 percent of our footwear come from China, any tariff on these items is a tax on Americans. Retail prices will be forced to go up and sales will come down. Jobs will be cut. 

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The potential of this proposed new 25-percent tariff on apparel, footwear and accessories (under Section 301 of the Trade Act of 1974) is a travesty waiting to happen. While the Trump administration has its sights set on Chinese theft of intellectual property, instead, it will be the American consumer that will get wacked.

 

It’s hard to fault President TrumpDonald John TrumpFive landmark moments of testimony to Congress Lindsey Graham basks in the impeachment spotlight Democrats sharpen their message on impeachment MORE for wanting to add tariffs. Every person who voted for him knew that was exactly what he planned to do. The problem is, like most things related to Trump, nobody thought he would actually do it, simply because it makes little sense to most people.

One could try to argue that targeting China for their $375-billion trade surplus by using an obscure trade law is an awkward way to resolve a thorny issue. Simply put, it won’t work, and it will likely cause more harm than good. However, the president got everyone’s attention and, perhaps, that’s what the he wanted to do. 

Our apparel and footwear industries are already some of the most overtaxed, over-regulated and over-burdened groups that exist in America. Attempts to hold on to our manufacturing base have been in decline since the Smoot-Hawley era of 1930.

Our domestic garment and footwear assembly business was protected by a quota system and by a tariff system, both of which failed over time, and the proof of that shows today as we are 98 percent imported.

Most Americans just don’t realize that they already pay a tariff on our products. In fact, our industry pays 51 percent of all tariffs collected by the U.S. government while representing only 6 percent of all goods that are imported.

We pay a 20 or 25 percent duty for a shirt or a pair of pants, and that is already factored into your retail price. The idea of adding on more duty to this is beyond absurd.

In February of 2017, Sen. Tom CottonThomas (Tom) Bryant CottonProgressive freshmen jump into leadership PAC fundraising Cotton: Trump could have US forces impose 'world of hurt' on Mexican cartels TikTok faces lawmaker anger over China ties MORE (R-Ark.) asked a rhetorical question on behalf of his constituents about the potential of raising prices due to a government intervention: “Why would we make the goods they buy at Walmart more expensive?” 

Sen. Cotton’s question rings true across America, but the query goes even deeper than that. We know that there are issues with theft of intellectual property from China, and we know that China could do more to prevent this.

However, being upset with China for one infraction doesn’t translate into taking it out on another. Trying to punish China with tariffs (that will ultimately be paid by American citizens) is just not practical. It’s like telling your son he did something wrong and then punishing your daughter.

Rick Helfenbein is president and CEO of the American Apparel & Footwear Association, an American industry trade group representing hundreds of clothing, footwear and sewn products companies and their suppliers. Follow him on Twitter @rhelfen.