• Trump has now threatened to impose tariffs on all US$500bn of imported goods from China.
  • The warning, along with his repeated complaints about rising interest rates, sent the US dollar falling against major currencies.
US Government data shows around $505bn of Chinese goods were imported to the US in 2017, leading to a trade deficit of nearly $376bn

US Government data shows around $505bn of Chinese goods were imported to the US in 2017, leading to a trade deficit of nearly $376bn

A group representing US apparel and footwear brands and importers has accused President Donald Trump of using the American consumer as a pawn in his trade conflict with China – after the US leader threatened to impose tariffs on all US$500bn of imported goods from the country.

On Friday (20 July), Trump said he was ready to impose new punitive tariffs on all US imports from China. The warning came just weeks after the administration released a list of goods worth $200bn to be hit by an additional 10% tariff – on top of $34bn worth of Chinese products on which an extra 25% tariff was imposed at the beginning of the month. (This $34bn worth of products is itself part of an initial $50bn list of Chinese goods on which tarffs are being imposed.) 

In an interview with CNBC broadcast on Friday, Trump said about trade imbalances: "We're down a tremendous amount. I'm ready to go to 500."

The announcement, along with his repetitive complaints about rising interest rates, sent the US dollar falling against major currencies.

Figures quoted by Reuters from US Government data show around $505bn of Chinese goods were imported to the US in 2017, leading to a trade deficit of nearly $376bn. Chinese imports from the US totalled $205bn in the first five months of 2018, with the deficit reaching $152bn.

American Apparel & Footwear Association president and CEO, Rick Helfenbein, said that while business and consumers want to participate in a trading system that creates more jobs in America and respects the country's intellectual property, tariffs will not do this.

"Tariffs make American companies and farms less competitive – not more competitive – threatening the very livelihoods of millions of American workers and farmers. We want to expand opportunities in the global market, which is made possible through trade agreements that remove trade barriers.

"It is time to stop using the American consumer as a pawn in this conflict. Tariffs are taxes. Period. This is a short-sighted approach that will hit low-income Americans the hardest, imposing new hidden taxes on everything they must buy for themselves and their families. While the people making the decisions in Washington will be able to afford to pay a little more for their necessities, the average American does not live under the same circumstances."

Helfenbein says more tariffs will not resolve the conflict – they will only create inflation, hurt the consumer, and damage the economy.

On Friday, the Office of the US Trade Representative began accepting public comments on the administration's proposal to implement the additional US$200bn of tariffs on Chinese imports. Specifically it wants to hear from the public regarding the specific tariff subheadings to be subject to increased duties, and whether they should be removed from the list, stay on the list at 10%, or stay on the list but at a lower or higher rate.

The latest list of items include textiles – including nearly all of the classifications for fibre, yarn and fabric – with denim, handbags and hats among the items.

While apparel or footwear are not on the list, analysts recently warned that the threat to these product categories could escalate beyond the incremental US$200bn tariffs, with Chinese disruption of the retail supply chain within China and a boycotting of US brands all likely scenarios.

Currently, the US fashion sector is mulling tactics to tackle Trump's tariffs, with the US protectionist trade policy agenda ranked the top challenge for the industry in 2018. However, caution is also being urged on the current round of tariff retaliations, especially as most apparel is not on the list.