As President Trump sets his sights on trying to rejoin the Trans-Pacific Partnership amid economic saber-rattling with China over possible tariffs, retailers in the U.S. are aligning forces with other business segments to urge lawmakers to tread easy on the trade front.
The worry about tariffs being imposed on both sides of the Pacific is that in the end, it’s the consumer who will lose out. And it means less spending on goods and services.
Levi Strauss & Co. chief executive officer Chip Bergh said his company is bracing for a potential trade war between the U.S. and China. Last week, he told WWD that as tariff threats increase, apparel and footwear could eventually be pulled into the fray. Right now, these segments are off-limits.
Bergh said from a broader perspective, a trade war with China “would not be a good thing, the consumer is going to get impacted. Think of that as higher cost coming into the U.S. that will ultimately get passed along to the consumer by many of these manufacturers, so it won’t be good for the U.S. economy, it won’t be good for the U.S. consumer.”
Which is the exact sentiment of more than 100 industry associations that inked a letter to the chairman and ranking member of the House Committee on Ways and Means urging lawmakers to “quickly mitigate” the trade situation with China. Even after Chinese President Xi Jinping told business leaders at a conference last week in Asia that the country would reconsider tariffs while looking to open up trade to the rest of the world, U.S.-based associations such as the National Retail Federation, the American Association of Exporters and Importers, the North American Meat Institute and the United Egg Producers urged Congress “to work to ensure that U.S. families are not forced to pay the price for China’s bad behavior.”
The coalition of associations and trade organization, which also included the Distilled Spirits Council, the Farmers for Free Trade, the Halloween Industry Association and the Retail Industry Leaders Association, told the Committee on Ways and Means that as they “are aware, tariffs are hidden, regressive taxes that will be paid by U.S. businesses and consumers in the form of higher product prices.”
“While the administration has signaled that the proposed tariffs are intended to inflict maximum pain on China and minimal pain on the U.S. consumer, unfortunately, that is not the case,” they wrote. “Many of the products that are currently on the proposed U.S. tariff list are consumer goods. Even more troubling the proposed list includes machinery, parts, chemicals and components that U.S. manufacturers and their workers need to make American products. This will impact downstream industries who rely on these materials and will ultimately result in higher prices for consumers for essential everyday products.”
The letter went on to note that higher costs for manufacturing will “result in less production here in the U.S. If imposed, these tariffs will result in higher prices for American consumers and fewer jobs for American workers.”
The coalition wants Congress and the administration to figure out a plan and create and execute a “strategic policy” aimed at addressing the “longstanding problems in China.