Wednesday, August 21, 2019
Volume 2, Issue No. 15

Outdoor & Footwear Industries Aren’t Spared in Tariff Maneuver

With data signals emerging and the drumbeats predicting a looming U.S. recession getting louder, the Trump Administration last week reversed course on its threat to slap 10-percent tariffs on all remaining imports from China on Sept. 1. Instead, the list of items to be impacted was divided into List 4A and List 4B with the latter getting its additional 10-percent duty levy delayed until Dec. 15. Additionally, some items, citing “health, safety, national security and other factors” were removed from the initial draft list published in May.

The List 4A tariffs, which will be levied in less than two weeks, will hit footwear and apparel the hardest, but also some sports equipment, headgear and components. The 122-page List-A document includes everything from inflatable footballs and soccer balls to lacrosse sticks, golf shoes and ski boots. Certain types of footwear and apparel, although it wasn’t immediately clear what types, won’t have a 10-percent tariff levied until Dec. 15. The Sports & Fitness Industry Association has been advised by the office of the U.S. Trade Representative that products on the water and not unloaded at a U.S. port by Sept. 1 will be subject to the tariff and not be exempt under a grace period provision. The SFIA, already assisting members with List 3 exclusion petitions, says it will offer a similar program for List 4 products.

“It is no coincidence that the Administration is allowing certain shoes to come in without raising taxes in hopes that prices do no rise at retail during the holidays,” Matt Priest, President & CEO of the Footwear Distributors and Retailers of America, said in a statement. “Our industry’s loud, unified voice left a clear impression that shoe tariffs are already high, upwards of 67.5 percent, and any further tariffs would directly raise costs on consumers and cost footwear jobs.”

Early last week, Sen. Rick Scott (R-FL) suggested tax cuts could be used to offset the costs of the additional tariffs on products imported from China. During H1, U.S. tariff revenue rose 73 percent year-over-year. And CNBC reported that U.S. levied $23.7 billion in tariffs between early 2018 and May 1.

The Outdoor Industry Association, whose own research shows outdoor businesses paid more than $1.5 billion more in duties over the 10 months ended June 30 on $200 billion worth of products, says the outdoor recreation equipment market, including items such as backpacks, camp chairs and bicycles, is already saddled with a 25-percent punitive tariff. The List 4 tariffs will slap an additional 10 percent duty on $8.5 billion more in outdoor products. Besides looking for industry proxies who can speak to the media about the impact of the tariffs, the trade group is organizing a Sept. 12 event on Capitol Hill. There, OIA members will discuss the China 301 tariffs with their elected representatives and detail the complexity of the outdoor supply chain for companies out of China. Parties interested in attending the day-long sessions are advised to contact the OIA’s Rich Harper at rharper@outdoorindustry.org.