A number of US trade bodies – including those that represent the clothing and footwear industries – have joined forces in urging the US government to scrap tariffs on Chinese goods as part of its “emergency response” in fighting the negative impact to the US economy of the coronavirus impact.
A letter to Larry Kudlow, director of the US National Economic Council – signed by representatives of the American Apparel & Footwear Association (AAFA), the Footwear Distributors and Retailers of America (FDRA), the US Fashion Industry Association (USFIA), and the National Retail Federation (NRF), along with 23 other trade bodies – noted the “grave economic damage” of the Covid-19 outbreak.
The group said: “We respectfully and urgently request the immediate elimination of tariffs imposed under Section 301 of the Trade Act of 1974 and retroactive refund of duties imposed on US imports of consumer and commercial products from China – such as travel goods, clothing, footwear, headwear, accessories, furniture, building products, baby products, textiles, and back to school items – be implemented as part of this emergency response.”
Many US brands have issued warnings over sales and profits, hurt by the impact of the outbreak that emerged in Wuhan, China, at the end of last year.
Last week, Gap said its first-quarter sales would be hit by $100m. Others such as Abercrombie & Fitch and Nike have announced a raft of store closures in a bid to control the spread of the virus.
“We can think of no other policy tool at the administration’s disposal that would have such a fast and beneficial impact as the immediate and retroactive removal of these tariffs,” read the letter.
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By GlobalData“Such a move would instantly put billions of dollars back into the US economy. This action also would provide certainty to American companies and encourage new hiring and new investment – moves that are now on hold given the unprecedented uncertainty facing the US economy. American consumers would also see benefits given that these tariffs act as a tax that often show up at retail in the form of higher prices. The lifting of these tariffs also requires no congressional action.”
Most apparel, footwear and home textiles products imported into the US from China are currently subject to an additional tariff of 7.5% as part of the trade spat between the two countries.
This is on top of the most favoured nation (MFN) rate applied by the WTO on US imports from China – which averaged 14.4% for knitted apparel (HS chapter 61) and 10.4% for woven apparel (HS chapter 62) in 2018.
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