A group of 25 of the largest U.S. retailers on March 19 voiced their concerns to President Donald Trump over tariffs he is reportedly considering on Chinese imports, noting that such an action could have a "negative impact," particularly on consumers.
Walmart Inc., Target Corp., and Costco Wholesale Corp. were part of a group of companies that sent a one-page letter Trump, stating that consumers would ultimately bear the burden should he follow through with reported tariffs on Chinese imports as a result of a Section 301 investigation into Chinese trading practices. The companies said current tariffs on a wide range of consumer products, including clothing and shoes, can range as high as 32% to 67% and argued that pushing them even higher could lead to increases in consumer prices on those products, as well as others such as electronics and home goods.
"Investigating technology and intellectual property policies and practices is critically important to our innovative economy," the companies, which also include Macy's Inc., Levi Strauss & Co. and Best Buy Co. Inc., wrote. "Yet were this investigation to result in a broadly applied tariff remedy on imports from China, it would hurt American households with higher prices and exacerbate a U.S. tariff system that is already stacked against working families."
The Trump administration is weighing whether to impose $30 billion in annual tariffs on U.S. imports from China in order to reduce the $375.2 billion U.S. goods trade deficit with the Asian nation by $100 billion, The Wall Street Journal reported March 15. Reuters also reported that Trump could impose tariffs of up to $60 billion as a result of the Section 301 investigation launched by the Office of the U.S. Trade Representative in August 2017 into Chinese trade practices.
The trade agency alleged that the Chinese government uses joint venture requirements and foreign equity limitations to secure American intellectual property as a cost of doing business in the Asian nation. The White House did not return a request for comment on the possibility of tariffs on China.
Footwear producers also expressed concern with potential retaliatory actions that Trump may take against China, which accounts for nearly three-quarters of the U.S. shoe import market.
A group of more than 80 footwear companies, including Nike Inc., Under Armour Inc. and Allen Edmonds Corp., wrote their own letter to Trump on March 19 saying tariffs would require major sourcing and production changes for the industry.
"While U.S. tariffs on all consumer goods average just 1.3 percent, they average 11 percent for footwear and reach rates as high as 67.5 percent. In 2017 alone, U.S. footwear companies and U.S. consumers paid nearly $3 billion in these hidden taxes," the companies wrote. "In addition, 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."
