Published: Wed, May 22, 2019
Global News | By Blake Casey

Adidas, Nike, Puma say new tariffs on China would be ‘catastrophic’

Adidas, Nike, Puma say new tariffs on China would be ‘catastrophic’

Some of the world's biggest footwear firms are urging Donald Trump to end the U.S. trade war with China, warning of a "catastrophic" effect on consumers.

The U.S. earlier this month increased tariffs from 10% to 25% on $200 billion worth of Chinese goods.

Footwear manufacturers and retailers on Monday stepped into the trade war between the USA and China, telling President Trump that a sneaker tax would be catastrophic and calling on him to halt the trade war that has been under way since past year.

Since then, China has struck a sterner tone, suggesting that a resumption of talks aimed at ending the 10-month trade war between the world's two largest economies was unlikely to happen soon.

"This significant tax increase, in the form of tariffs, would impact every type of shoe and every single segment of our society", the letter states.

The Footwear Distributors & Retailers of America (FDRA) estimates the hike in tariff would add $7 billion in additional costs for customers every year.

The footwear companies who signed the letter, including Clarks, Dr Martens and Converse, claim that while the average United States tariff on footwear is 11.3%, in some cases it can reach as high a 67.5%.

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A Bloomberg article on May 20 discussed how tariffs are a sensitive topic for the footwear industry, which pays the highest duties in the United States. Mr. Trump also proposed an expanded round of tariffs on what's effectively the remainder of Chinese imports of about $300 billion. "It will also threaten the very economic viability of many companies in our industry".

Resolving that issue in an enforceable manner is a core US demand in trade negotiations.

Some companies have spent the past several decades setting up their supply system in China as factories there perfected low-priced production with simple shipping routes to the U.S. West Coast.

"Your proposal to add tariffs on all imports from China is asking the American consumer to foot the bill", the chafing shoe companies said.

Nike, for one, makes 26% of its footwear in China, reported CNN, which also said that the Asian nation accounted for 72% of all footwear the US imported in 2017.

But he said he had told Chinese President Xi Jinping before the most recent rounds of talks that any deal could not be "50-50" between the two countries and had to be more in favor of the United States because of past trade practices by China.

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