27 May 2019
U.S. Footwear Distributors Ask Trump to Reconsider Additional Tariffs
On 20 May, the Footwear Distributors and Retailers of America sent a letter to President Trump providing an extensive argument against a proposal currently under consideration that would impose additional duties of up to 25 percent on a range of critical consumer products from mainland China, including all footwear shipments from the mainland.
The FDRA estimates that the proposed action would add US$7 billion in additional annual costs for U.S. consumers. It noted in its letter to Trump that “this dramatic increase would be on top of the billions Americans already pay as a result of the current tariff burden on footwear imports that was started in 1930”, referencing the infamous Smoot-Hawley Tariff Act whose “beggar thy neighbour” policy has been blamed by historians for deepening the Great Depression and leading to global economic and political chaos.
The FDRA argued that footwear duty rates “fall disproportionately on working class individuals and families” because they run much higher than average U.S. duty rates and working class families spend a higher proportion of their income on necessities such as footwear. The association observed that while footwear duties average 11.3 percent, they can range as high as 67 percent. An additional 25 percent duty would thus raise the average duty on footwear from mainland China to 36 percent, and duties on certain products could reach 92 percent.
The FDRA called out Trump’s suggestion (without referring to him as a source of that suggestion) that industries could quickly shift sourcing, stating that much footwear production has already been moved from mainland China to other locations while cautioning that “footwear is a very capital-intensive industry, with years of planning required to make sourcing decisions, and companies cannot simply move factories to adjust to these changes.” The association therefore urged the president to immediately abandon his proposal because the imposition of additional duties would “threaten the very economic viability of many companies in our industry.”
The letter also sought to rebuke claims that mainland China would pay for the tariffs, saying that the U.S. government is “asking the American consumer to foot the bill”, and concluded that “it is time to bring this trade war to an end.”