Trump's new China tariffs will kill retail industry: American Apparel and Footwear Assn. CEO
American Apparel & Footwear Association CEO Rick Helfenbein told FOX Business that President Trump’s plan to increase tariffs on Chinese goods would hurt U.S. retailers.
“Businesses have barely been able to survive the 10 percent tariff. 25 percent is not survivable," he said during an interview on “Cavuto: Coast-to-Coast” on Tuesday.
Helfenbein said he predicts many of his association's members could soon flee from doing business in China, adding, the major problem is how “locked” in the retail industry is with China.
“41 percent of all apparel, 72 percent of all footwear, 84 percent of all accessories come into China. We can't escape it, and with the imminent rise from 10 to 25 percent, our members have goods on the water. They're going to get hammered,” said.
The increased tariff would affect nearly 6,000 products and parts, including such items as furniture, clothing, electronics, handbags, luggage, hardware, shampoo, perfume, dishes, bedsheets, bicycles, meat and cereal. Bank of America Merrill Lynch is predicting new-vehicle prices could rise as parts from China become more expensive.
Helfenbein said the industry represents 6 percent of all imports coming into the United States and pays 51 percent of all tariffs collected.
“Two-thirds of the GDP is consumer based. 10 percent of the jobs in America are retail. And in the first four months of this year, more stores have announced closings than all of last year,” he added.
A study by the Trade Partnership found that a 25 percent tariff on the $200 billion in Chinese imports, along with existing taxes on $50 billion in Chinese shipments on steel and aluminum, would reduce U.S. employment by 934,000, costing the average family of four $767 a year.
Trade-sensitive technology and industrial stocks led the Dow Jones Industrial Average lower for most of the trading day Tuesday, something Helfenbein told FOX Business should alarm people.
“The president is doing what he said he was going to do. The fact that the markets are surprised is scary.”
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Helfenbein said is hopeful that the president's threat to increase tariffs is simply a negotiating tactic, but he is fearful that if tariffs go into place Friday, the retail industry will well enough be “cooked.”
U.S. Trade Represenative Robert Lighthizer said Monday that the Trump administration will increase its tariffs on $200 billion in Chinese goods on Friday and accused Beijing of “reneging” on its commitments during earlier trade talks.