Trump Unveils Small Tariff Reprieve for Handbags

The U.S. government has scrapped plans to increase levies on $250 billion of Chinese imports on Tuesday.

Street StyleStreet Style, Fall Winter 2019, New York Fashion Week, USA - 13 Feb 2019

The U.S. has shelved additional tariffs for handbags due to come into force next week after it struck a partial trade deal with China, but there was no relief for apparel and footwear.

After two days of negotiations in Washington, D.C., which saw President Donald Trump meet China’s top trade negotiator vice premier Liu He, it was confirmed that levies on $250 billion of Chinese-made goods, including handbags, would no longer rise from 25 to 30 percent, as planned, on Tuesday.

There was no mention of lifting the 15 percent tariffs on large swathes of apparel and footwear that were imposed last month as the first part of a move to target another $300 billion of items, although Robert Lightizer told reporters Trump had not yet decided whether to follow through with threats of a second tranche in mid-December, which would impact all clothes and shoes.

Rick Helfenbein, president and chief executive officer of the American Apparel & Footwear Association, said: “While we welcome the president’s decision to withhold an additional tariff increase on many of our products, the reality is that everything currently being hit with punitive tariffs is still being charged.”

He explained that this meant Americans are still being burdened with an additional 25 percent on backpacks, handbags, luggage, hats and gloves. It also means that 92 percent of clothing, 53 percent of our shoes, and 68 percent of our home textiles imported from China continue to be charged an additional 15 percent tariff.

“These rates are on top of the hefty tariffs already being charged on these products,” he added. “The continued costs and uncertainties associated with this tariff policy mean the Grinch still has stolen our Christmas.”

While David French, senior vice president for government relations at the National Retail Federation, believes the administration’s move was a step in the right direction, he stressed that uncertainty for retailers continues. “We urge both sides to stay at the negotiating table with the goal of lifting all tariffs and fundamentally resetting U.S.-China trade relations,” he said.

Karen Giberson, president of the Accessories Council welcomed the news, but told WWD that the handbag industry is still grappling with 25 percent tariffs at a difficult time for the category.

“It absolutely is a big burden because business in handbags is tough anyway,” she added. “The only bags that are having any kind of increase are belt bags and backpacks but bags in general have been off for a while. I think we had 8,200 stores closed this year,” she said.

As for the partial trade deal hashed out between officials Friday, Trump described it as “phase one” of a three-part accord. As well as the U.S. agreeing to scrap some planned tariff rises, China committed to increasing its purchases of U.S. agricultural products.

And while industry groups were on the fence, it appeared to do the trick for the financial markets. The Dow Jones Industrial Average closed up 320 points, or 1.2 percent, to 26,816.59. The S&P 500 was up more than 1 percent.

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