Global Trade

Why trade matters to retail

NRF believes the United States needs a 21st century trade policy that recognizes that imports lower the cost of living for all Americans and support millions of U.S. jobs in fields such as research, design, sourcing, ecommerce, distribution, transportation, merchandising and sales.

  • Retailers rely on imported merchandise to provide American families products they need at prices they can afford.
  • From clothing to electronics, many consumer products are no longer mass-produced in the United States, leaving foreign manufacturers as the only sources.
  • It would take years to re-establish U.S. manufacturing of those products. Even if that could be done, modern factories would be highly automated and provide relatively few jobs.

Trade barriers such as tariffs, which are hidden taxes that drive up the price of imports, or “quotas,” which limit availability of consumer goods by restricting the number of items imported, should be eliminated.


China tariffs

NRF opposes tariffs imposed by either side. China is perhaps retailers’ most important source of high-quality and affordable consumer products and an important and growing market for U.S. exporters. NRF believes the trade war that began last year is punishing U.S. consumers more than it is punishing China while doing little to create U.S. jobs because tariffs are essentially a tax that U.S. businesses and consumers pay.

In the summer of 2018, President Trump imposed 25 percent tariffs on $50 billion in Chinese imports, saying they were invoked because of China’s unfair trade practices including violation of intellectual property rights and forced technology transfers. China immediately announced tariffs on an equal amount of U.S. goods. In September 2018, Trump imposed 10 percent tariffs on an another $200 billion in products from China, and said those tariffs would increase to 25 percent this January. The increase was pushed back after Washington and Beijing agreed to trade talks, but talks broke down in the spring and the increase finally took effect this June.

Trump met with Chinese President Xi Jinping later in June and talks briefly resumed but failed to end the trade war. Afterward, new 15 percent tariffs on a wide range of consumer goods from China took effect on September 1 and are scheduled to be expanded to additional products on December 15, covering a total of about $300 billion in imports.

Tariffs of 25 percent imposed on $250 billion worth of Chinese goods over the past year were scheduled to be increased to 30 percent on October 15. But Trump suspended that increase after U.S.-China talks held in Washington the previous week resulted in tentative agreement on the outlines of a partial “phase one” trade deal. Details of the deal still need to be put in writing, and December’s round of tariffs are still set to take effect as scheduled in the meantime. If that happens, virtually all imports from China will be under tariffs by the end of this year.

Learn more about China tariffs


Steel and aluminum tariffs

steel and aluminum tariffs

Also in 2018, Trump imposed tariffs on steel and aluminum affecting a wide variety of countries in addition to China. Like the other China tariffs, they have drawn retaliation and are contributing to the trade war. NRF called the steel and aluminum tariffs a “self-inflicted wound on the nation’s economy” that will drive up prices for U.S. consumers on metal-dependent products. These tariffs were brought under a section of trade law involving national security, and NRF has endorsed legislation requiring that security-related tariffs be reviewed by Congress.

More on steel and aluminum tariffs


NAFTA

Trump has repeatedly threatened to withdraw from the North American Free Trade Agreement, and in 2017 he ordered that it be renegotiated. After a year of talks between the three countries, a replacement called the United States-Mexico-Canada Agreement was unveiled in September 2018. The measure is awaiting approval by the U.S. Congress and the corresponding bodies in Mexico and Canada.

NRF agrees that NAFTA should be updated to address issues such as digital trade that did not exist when the agreement was first established. But NRF strongly opposes withdrawal and believes that updates should truly modernize NAFTA and do no harm to the underlying agreement. 

Since it took effect in 1994, NAFTA has:

  • Eliminated billions of dollars of tariffs on both imports and exports shipped between the United States, Canada and Mexico.
  • Supported millions of U.S. jobs.
  • Lowered prices on a wide variety of consumer goods.
  • Made seasonal food products more widely available and affordable.
  • Allowed parts for U.S.-made products to be imported tariff-free from either of the other two partner countries, benefiting manufacturers and retailers.
  • Allowed complex products to be moved back and forth across borders during the manufacturing process.

More about NAFTA

Learn more about trade

NAFTA
 
NRF supports NAFTA modernization but warns that withdrawal from the agreement should not be considered.
Read more
Tariffs
 
NRF supports free trade and the elimination of tariffs that harm U.S. businesses and consumers.
Read more
The Impact of Tariffs on Small Business
 
Hear stories from small retailers across the country.
Read more