Adidas, PUMA say new tariffs would be 'catastrophic'

Wednesday, May 22, 2019

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WASHINGTON, United States (AFP) — Adidas, Nike and PUMA on Tuesday urged President US Donald Trump to prevent the shoe industry from falling victim to the trade war with China, saying new tariffs could be “catastrophic”.

In a letter to Trump, those big name manufacturers joined forces with more than 170 other American shoe manufacturers and retailers to call on Trump to exempt shoes from a new round of punitive tariffs on US$300 billion in Chinese goods.

In the escalating trade war with Beijing, Trump this month increased existing tariffs on US$200 billion in Chinese imports to 25 per cent, and is threatening to extend those duties to nearly all Chinese products imported into the United States.

That would mean additional taxes on a range of consumer goods, including electronics and clothing such as athletic shoes and iPhones — which has sparked fear in retailers and producers who rely on goods from China.

“The proposed additional tariff of 25 per cent on footwear would be catastrophic for our consumers, our companies, and the American economy as a whole,” the letter from the shoe coalition states.

The firms said the industry already pays US$3 billion in duties and that additional tariffs would increase costs and prices.

“There should be no misunderstanding that US consumers pay for tariffs on products that are imported,” the companies said, refuting Trump's frequent erroneous statement that China pays the tariffs, creating a windfall for the US Treasury.

While Trump has called on industries to move away from China or produce their product in the United States, the shoe industry firms said they need “years of planning... to make sourcing decisions, and companies cannot simply move factories to adjust to these changes.”

The US Trade Representative's office published the list of products that would be targeted by new tariffs, and has called for public comment, including a hearing set for June 17.

In the prior round, the White House granted tariff exemptions for some critical products.


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