Former President Donald Trump is ramping up campaign rhetoric in advance of the November election—and doubling down on talk of new China tariffs.
Trump told Fox News on Sunday that he aims to raise duties on imports from China by more than 60 percent if re-elected, echoing claims he’s made in recent months that he would expand upon the Section 301 tariffs he implemented during his presidency.
Tensions between the U.S. and China escalated into a full-blown trade war during Trump’s term in office, resulting in $50 billion in Chinese goods being hit with punitive duties of up to 25 percent in June 2018. The current administration has maintained the tariffs throughout President Joe Biden’s first term, much to the chagrin of importers that have called for relief from the burden of added duties amid heightened inflation and logistics costs.
“This would be like imposing a 60-percent sales tax on every American closet, with that tax falling hardest on lower income American families,” American Apparel and Footwear Association (AAFA) president and CEO Steve Lamar told Sourcing Journal this week. “Five years ago, President Trump was unsuccessful in getting Beijing to change its behavior by making it more expensive for Americans to get dressed every morning, and we don’t see that changing in a second Trump Administration.”
“There’s a ton of analysis out there that shows the first trade war was a big, fat loser for the U.S.,” Footwear Distributors and Retailers of America (FDRA) president and CEO Matt Priest added, noting that the footwear sector paid over $6.4 billion in additional duties since Sept. 1, 2019, when List 4A imposed Section 301 tariffs of 15 percent on around half of the footwear imported from China.
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“It would be catastrophic to the American economy, but the former president has a track record. He proclaims he’s going to do these things and he does them,” he said. “It creates a lot of uncertainty and a lot of increased costs for American companies and consumers, so we have to take it seriously.”
The office of the U.S. Trade Representative (USTR) is preparing to release its annual Section 301 report. “We’re waiting with bated breath to see if the administration actually decides…to alter some of the tariffs are currently on Chinese goods,” Priest said. “We keep hearing that there may be a rebalancing opportunity—if [USTR is] going to go down a road where they’re going to shift some things around and try to continue to collect the same amount of money off of China, it may be on different products that are actually covered under the China 2025 plan,” he added. “That would create some relief on consumer goods.”
The current administration has also toyed with the idea of raising tariffs on China-made goods as it continues to contend with the superpower’s unfair economic policies and intellectual property theft. “Most of the talk I’ve heard has been around increasing them on electric vehicles or other kinds of high-value goods that are part of China’s industrial policy,” he explained. “I haven’t heard or gotten any inclination that tariffs would increase on everyday consumer goods; I would be pretty shocked if that happened. But I’m not saying it’s out of the realm of possibility,” the FDRA lead said.
Priest said that with tough-on-China policy being one of the few bipartisan meeting grounds, lawmakers on both sides of the aisle have been disincentivized to speak out on what he views as failed policy. “We’re missing policymakers and politicians that have the guts to stand on what’s economically right and what’s beneficial to American consumer, even if the soundbite doesn’t play well,” he added.
The National Council of Textile Organizations (NCTO), which represents American textile manufacturers, said the U.S. needs more safeguards, not less, against the deluge of China-made apparel and textile products making their way into the country.
“U.S. enforcement actions including the Section 301 tariffs and the Uyghur Forced Labor Prevention Act (UFLPA) have been a step in the right direction, but we have not seen China respond with the necessary reforms to become a market-based, responsible trading partner,” the group said this week. “China’s long history of utilizing predatory trade practices, including massive subsidization of its exports and forced labor practices, has led to a race to the bottom and cost millions of U.S. manufacturing jobs.”
An NCTO spokesperson told Sourcing Journal that at least nine American textile manufacturers have shuttered over the past four months—a situation attributable in part to China’s continued trade abuses. The country is “shifting more cotton production to Xinjiang and further depressing apparel prices to the U.S. market in an effort to convince sourcing agents to stick with them despite the escalating risks,” they said.
“A logical response to deteriorating conditions, and one that we expressed in NCTO’s public comments as part of the four-year review of the [Section] 301 tariffs, would be to increase the penalty duty rate on finished apparel and textiles, among other necessary policy responses including addressing the de minimis loophole,” NCTO added.
U.S. importers have plenty of choices when it comes to trade partnerships, the group added. The U.S. Department of Commerce identified more than 80 nations in its most recent Major Shippers report, which details import statistics for apparel and textiles. “This multiplicity of sourcing options ensures that there is intense competition in the global trading system,” and many alternative suppliers are U.S. free-trade-agreement or preference-program partners with duty-free access to the American market.
“Increasing tariffs on Chinese imports, while granting exclusions or manufacturing inputs and machinery not available domestically, will spur further investment and production in the vital U.S. textile manufacturing sector and bolster the co-production supply chains we have with our Western Hemisphere trade,” the group said.