WASHINGTON – The American Apparel & Footwear Association, the Footwear Retailers & Distributors of America, the National Retail Federation, the Retail Industry Leaders Association, and the United States Fashion Industry Association have released a study that calls out detrimental economic impacts of Section 301 tariffs.
According to the report, American businesses and consumers have been adversely affected by the imposition of the punitive tariffs that began in 2018. The report provides an in-depth assessment of the impacts of the Section 301 tariffs over the last four years on U.S. imports of apparel, footwear, travel goods and furniture imported from China. It is based on U.S. government data amplified by responses to a December 2022 survey of American companies sourcing those goods from China.
The study makes three key findings:
- The negative impact of the tariffs – higher costs and higher prices – fell on U.S. companies and American families;
- The tariffs have led to a host of significant indirect costs, including those associated with attempts to establish bifurcated supply chains; and
- Increased prices on consumer goods have had a greater negative impact on American households for which those goods represent greater shares of household income: households in the lowest 20% of income groups; minority-headed households, and households headed by individuals without a college education.
Tariffs on U.S. imports of apparel, footwear and travel goods, in particular, are among the highest in the U.S. tariff code, even absent the Section 301 duties on U.S. imports from China. For example, U.S. MFN duties on low-value and children’s footwear are much higher than those on other types of footwear. The Section 301 duties add considerably – sometimes up to 25% -- to this tariff burden for products imported from China.
To put it in perspective, the tariffs most heavily impacted U.S. imports from China of waterproof footwear. The tariffs imposed an annual direct cost on U.S. importers of over $250 million, escalating every year to over $450 million in 2022. No footwear tariff exclusions were granted to mitigate the negative impacts of the tariffs on footwear sourcing companies. According to Mercatus Center, every one of the 442 footwear product exclusion requests filed was denied.
Access the study here, and additional findings on social media with #TariffsHurt.
Related, an International Trade Commission report from October 2022 highlighted that “the disproportionate impacts of tariffs on U.S. workers as consumers” including the “discriminatory effect on female workers, because tariff rates are much higher on women’s clothing than on men’s clothing.”
The American Apparel & Footwear Association (AAFA) is the national trade association representing apparel, footwear and other sewn products companies, and their suppliers, which compete in the global market. Representing more than 1,000 world famous name brands, AAFA is the trusted public policy and political voice of the apparel and footwear industry, its management and shareholders, its more than three million U.S. workers, and its contribution of $470 billion in annual U.S. retail sales. AAFA drives progress on three key priorities: Brand Protection; Supply Chain & Sourcing; and Trade, Logistics, & Manufacturing. AAFA approaches this work through the lens of purpose-driven leadership in a manner that supports each member’s ability to build and sustain inclusive and diverse cultures, meet and advance ESG goals, and draw upon the latest technology. aafaglobal.org
Founded in 1944, the Footwear Distributors & Retailers of America (“FDRA”) is governed and directed by footwear executives and is the only trade organization focused solely on the footwear industry. FDRA members range from small family-owned footwear businesses to multinational footwear companies. Members include the majority of U.S. footwear manufacturers, brands, retailers and importers. In all, FDRA supports nearly 500 companies and brands worldwide, representing 95% of total U.S. footwear sales, making it by far the largest and most respected American footwear trade and business association. fdra.org
The National Retail Federation, the world’s largest retail trade association, passionately advocates for the people, brands, policies and ideas that help retail succeed. From its headquarters in Washington, D.C., NRF empowers the industry that powers the economy. Retail is the nation’s largest private-sector employer, contributing $3.9 trillion to annual GDP and supporting one in four U.S. jobs — 52 million working Americans. For over a century, NRF has been a voice for every retailer and every retail job, educating, inspiring and communicating the powerful impact retail has on local communities and global economies. nrf.com
The Retail Industry Leaders Association (RILA) is the US trade association for leading retailers. We convene decision-makers, advocate for the industry, and promote operational excellence and innovation. Our aim is to elevate a dynamic industry by transforming the environment in which retailers operate. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs, and more than 100,000 stores, manufacturing facilities, and distribution centers domestically and abroad. rila.org
The United States Fashion Industry Association (USFIA) is dedicated to fashion made possible by global trade. USFIA represents textile and apparel brands, retailers, importers, and wholesalers based in the United States and doing business globally; working to eliminate tariff and non-tariff barriers that impede the industry’s ability to trade freely and create economic opportunities in the United States and abroad with the goal of doing what we can to make the world a better place for our customers, our colleagues, and our suppliers. usfashionindustry.com