U.S. Textile Industry Pushing Hard for Tariffs on Chinese Apparel
We've been talkin' tariffs for awhile now on Promo Marketing. With President Trump's plan to implement new and escalated tariffs against China and the European Union, there's been much to discuss.
Foreign entities believe it would destabilize trade and potentially lead to an all-out trade war. And promotional products professionals have voiced their looming fears over the potential tariffs, which could at some point affect products commonly sold in the industry.
“Tariffs on electronics, apparel and other consumer products would increase prices for U.S. consumers and businesses, while doing little to address the fundamental challenges posed by unfair and discriminatory Chinese trade practices,” PPAI said in a statement. “These increased costs would effectively levy a tax on U.S. consumers and businesses, negating gains for American workers from U.S. tax reform.”
Now it seems the plot has thickened. In Trump's initial list of products subject to the tariffs, home textiles were notably absent (although types of textiles machinery were included). Now, the National Council of Textile Organizations (NCTO) is calling for Chinese textiles to be added to the official roster, according to Home Textiles Today.
“NCTO is pleased that some textile products are on the second list," said NCTO president and CEO Auggie Tantillo, according to Home Textiles Today. "It would have a greater deterring effect, however, if more textile and apparel end products were included. As such, NCTO looks forward to working closely with the Trump administration to refine it.”
The NCTO has been pushing for these tariffs for some time now. Back in May, Tantillo testified in favor of the textiles' addition at the Office of the U.S. Trade Representative (USTR). Tantillo cited China's "predatory, illegal trade actions, including Intellectual Property Rights [IPR] theft," with the loss of hundreds of thousands of manufacturing jobs in the textiles industry, according to another article from Home Textiles Today.
He continued to say that China's domination of the global textile market can be attributed in part to intellectual property theft.
“From the violation of patents on high performance fibers, yarns and fabrics to the infringement of copyrighted designs on textile home furnishings, China has gained pricing advantages through blatantly illegal activities," Tantillo said. "Putting 301 tariffs on Chinese textile and apparel exports would send a long-overdue signal that these predatory actions will no longer be tolerated."
Tantillo was not the only one to back tariffs on finished apparel and textiles. The NCTO, the U.S. Industrial Fabrics Institute and the Narrow Fabrics Institute submitted a joint 24-page statement for the record as part of the public hearing that closed on May 11.
Of course, if textiles and clothing are added to the list, this could greatly affect the promotional apparel industry. Currently, the apparel industry has been left largely unaffected by the proposed tariffs, according to Bloomberg. But a textiles inclusion could lead to price increases on Chinese-made apparel, forcing promotional products distributors and suppliers to either absorb the costs or pass them on to end-buyers. Industry companies could compensate by turning to more American-made apparel, but the inventory and infrastructure required to offset all imported apparel is not currently in place. (China has already threatened tariffs on $1 billion worth of American cotton exports, which would hurt American farmers and U.S. apparel manufacturers.)
A study from the National Retail Federation (NRF) and the Consumer Technology Association concluded that imposing tariffs of $50 billion on Chinese imports could reduce U.S. GDP by nearly $3 billion and eliminate 134,000 U.S. jobs annually.
“Tariffs are taxes on American consumers, plain and simple,” Matthew Shay, CEO of the NRF, said in a statement Friday. “These tariffs won’t reduce or eliminate China’s abusive trade practices, but they will strain the budgets of working families by raising consumer prices.”
Will the administration add textiles to the list? We'll keep you updated.