(Reuters) – U.S. footwear companies, including Nike Inc and Under Armour, on Monday urged U.S. President Donald Trump to remove footwear from the proposed tariffs list on goods imported from China.
FILE PHOTO: The logo of Dow Jones Industrial Average stock market index listed company Nike (NKE) is seen in Los Angeles, California, United States, April 12, 2016. REUTERS/Lucy Nicholson/File Photo
“The proposed additional tariff of 25 percent on footwear would be catastrophic for our consumers, our companies, and the American economy as a whole,” a group of 173 companies said in a letter here.
Trump increased tariffs on $200 billion worth of Chinese imports to 25% from 10% earlier this month, a move that is expected to raise prices on thousands of products including clothing, furniture and electronics
Trump is expected to impose 25% tariffs on another $300 billion worth of Chinese goods when he meets Chinese President Xi Jinping next month.
“As an industry that faces a $3 billion duty bill every year, we can assure you that any increase in the cost of importing shoes has a direct impact on the American footwear consumer,” the companies said.
The letter was also sent to Treasury Secretary Steve Mnuchin, Commerce Secretary Wilbur Ross, Trade Representative Robert Lighthizer and National Economic Council director Larry Kudlow.
The Footwear Distributors & Retailers of America (FDRA) estimates the hike in tariff would add $7 billion in additional costs for customers every year.
The companies noted that the tariffs on footwear average 11.3% and reach rates as high as 67.5%. Adding a 25% tax increase on top of these tariffs would mean Americans could pay a nearly 100% duty on their shoes, the companies said in the letter.
Last week, the world’s largest retailer Walmart Inc warned that its prices would increase due to higher tariffs on goods from China and that the levies were already hurting its furniture business.
Macy’s also said that the tariffs enacted on May 10, does have some impact, particularly on its furniture business.
Reporting by Nivedita Balu in Bengaluru; Editing by Shailesh Kuber