Business· Retail

170 footwear companies, including Nike and Adidas, call China tariffs ‘catastrophic’

minutes 2019/05/21 06:24:27
China US trade war, Footwear industry, Open letter

May 21, 2019 (China Knowledge) - The footwear industrials are bearing the brunt of the US tariffs on China’s export. 170 footwear makers and retailers, including Nike, Adidas, Clarks, Crocs, Reebok, and Skechers, band together and spent an open letter to U.S. President Donald Trump appealing to him to remove the footwear from the proposed next round of tariffs on USD 300 bln of Chinese exports.

In the letter, the companies said that the proposed extra tariff of 25% on footwear “would be catastrophic for our consumers, our companies, and the American economy as a whole.”

The letter also mentioned that: “As leading American footwear companies, brands, and retailers, with hundreds of thousands of employees across the U.S., we write to ask that you immediately remove footwear.”

The companies highlighted that end consumers will ultimately bear the cost of tariffs. Companies pricing in tariffs were referred to as “unavoidable” due to the transportation costs, increase in labour rate and additional duties.

According to Footwear Distributors & Retailers of America, the industry’s trade association, it is found that the 25% tariff will add USD 7 bln in additional costs for customers, every year.

Footwear companies are mitigating their costs by shifting their production sites out of China to avoid the tariffs. However, these will require “years of planning” and are not viewed as an immediate solution. 

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