Handbag retailers bracing themselves for potential higher tariffs may be granted some additional breathing space.
Before the holidays, the Trump administration took a tough stance, stating that it would push up tariffs on a barrage of Chinese-made consumer-facing goods, including handbags, if trade talks failed at the end of an agreed 90-day negotiation period.
But with the March 1 deadline fast approaching, it appears this viewpoint may have softened, with President Donald Trump telling reporters Tuesday that it is “not a magical date.”
“The real question will be: will we raise the tariffs?” he said. “I know that China would not like for that to happen. So I think they are trying to move fast so that doesn’t happen. But we’ll see what happens…I can’t tell you exactly about timing, but the date is not a magical date. A lot of things can happen.”
According to various media reports, a final decision is likely to be made once Trump meets with China’s President Xi Jinping — a meeting that could happen in the next few weeks, although nothing is certain.
This is in contrast to December comments made by U.S. Trade Representative Robert Lighthizer. At the time, he said that as far as he was concerned, March 1 was a “hard deadline.”
Retailers selling handbags are certainly hoping for a positive resolution. While the rest of the fashion sector escaped relatively unscathed in the tit-for-tat trade war that dominated 2018, handbags were not so lucky.
Alongside a raft of other consumer-facing goods, totaling $200 billion in imports, handbags were hit with 10 percent levies last year. That was set to rise to 25 percent on Jan. 1, but the U.S. halted those plans as part of the negotiations.
But if the talks fail, the Trump administration has said that tariffs would rise after all. That would also mean that levies on a further $267 billion of goods — something Trump has threatened — would become much more likely. If that happens, the total amount of tariffs would surpass the value of all Chinese imports the U.S. accepted in 2017.