Industry criticism comes just days before tariffs kick in on Sept. 1
The tariffs could raise prices just as holiday buying is kicking in. Last week Trump increased duties for the vast majority of US imports from China. There will be a five percent increase that will take some tariffs to 15 percent and others to 30 percent. The tariffs will be rolled out in stages from September 1 through December. The could target some popular items such as mobile phones, laptops, and shoes.
Footwear groups sign on to critical letter
More than 200 footwear manufacturers and also retailers including such brands as Nike and Foot Locker signed the industry letter which said that the new tariffs could cost US consumers an additional $4 billion per year as well as increasing the likelihood of an economic depression.
The letter was also signed by 160 other trade groups including software and electronics manufacturers as well as retailers
The groups warned Trump of higher prices and a decline in consumer confidence. They urged Trump to give up the tariff strategy.
Two critical voices
Matt Priest, president of the Footwear Distributors and Retailers of America said:: “We’ve been telling the White House since the beginning that tariffs will be paid by Americans in the form of higher prices, and that due to our already high import taxes, this will be a job killer” In the letter, the footwear group specifically denied Trump’s claim that China would bear the costs of the taxes, saying that the tariffs acted as hidden taxes paid by US individuals and families. So far the usually influential industrial lobbies have been unable to budge Trump to get him to stop escalating the trade war with China.
Earlier on Sunday, the CEO of the Business Roundtable also criticized Trump policy: “Joshua Bolten, the president and chief executive of the Business Roundtable, an organization representing the leaders of the largest American companies, said on Sunday that many C.E.O.s were already “poised right on top of the brake.” “The risk is that everybody’s going to slam on the brake, and that would be a disaster,” Mr. Bolten said on “Face the Nation” on CBS. President Trump’s latest moves, Mr. Bolten said, could “disrupt trade and commerce in a way that would cause huge damage — not just to the Chinese economy, but to the global economy and the U.S. economy.””
Industries agree with many economists that policies could promote a recession
The companies said that recession risks are rising. Confrontation with China created uncertainty that was affecting the economy.
The group noted that an economic downturn would remove disposable income at the same time as consumers are having to pay more for products. This should have an effect as an argument on Trump as he will be facing an election next year.
Trump has shown some worry about the effects of the tariffs. He has delayed imposing tariffs on some popular items until December so that price increase wont hit consumers until after Xmas shopping. Trump is as usual inconsistent in what he says. One day he castigates China but the next optimistically predict a deal.
