Trump tariffs would be catastrophic for footwear industry: Footwear Distributors and Retailers of America CEO
Footwear Distributors and Retailers of America CEO Matt Priest told FOX Business the White House's proposal for increased tariffs would severely damage the footwear industry.
“Footwear, specifically, already pays exorbitant duties and has been doing so since 1930. Our duty bill last year was $3 billion on Chinese goods that was $1.5 billion. So we wanted to alert the president that the U.S. government is already taxing footwear consumers to this day, and any additional tariffs under the Section 301 with China would be catastrophic for our consumers," he said on “Cavuto: Coast-to-Coast” Wednesday.
Priest wrote a letter to President Trump Monday outlining the impact that the new import tax would have on businesses and working-class Americans. Over 170 shoe companies signed on to the letter.
According to the trade organization, U.S. family would have to spend an extra $131.93 on footwear annually should the proposed tariff increase take effect. It also predicted that consumers overall would pay $7 billion in additional costs each year for shoes.
"When you talk to a family that's purchasing shoes at a mass retailer, on a shoe that could have a 92% duty rate if this goes forward, they've got to be concerned about where their cost increases will come from," Priest added.
He noted he has not heard from any White House official about footwear receiving an exemption or credit similar to the one the Trump administration is considering for farmers.
“What is concerning about the exclusion process is the fact that they haven't even launched the exclusion process for List 3 that was just bumped from 10-25%. So the thought that we would have an exclusion process in place in time for this catastrophic event for List 4 is not something we are hanging our hat on.”
Priest added that he isn't taking for granted the fact that tariffs may only be short-term and said his members are thinking about sourcing options and opportunities, possibly with other Asian countries.
“We had that in place with the Trans-Pacific Partnership, and we're looking for that. If we could reconstitute that agreement, that would be amazing,” he said. “But from there, there's a lot of footwear that doesn't have the ability to move because it's capital intensive, at least in the short-term. You're going to see prices, particularly on things like kids' footwear, increase, and we're going to continuously have to ask working families to pay that bill when our members and the brands and retailers can't move that quickly to get that product out of China.”
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A recent study by Trade Partnership Worldwide predicted an average American family of four would pay $2,300 more in goods and services each year if Trump imposes a 25 percent tariff on all goods from China. If tariff levels remain where they currently stand, the average American family is expected to pay about $770 in higher costs each year the tariffs remain in place.