The American Apparel & Footwear Association, the Footwear Retailers & Distributors of America, the National Retail Federation, the Retail Industry Leaders Association, and the United States Fashion Industry Association have released a study that calls out detrimental economic impacts of Section 301 tariffs.
According to the report, American businesses and consumers have been adversely affected by the imposition of the punitive tariffs that began in 2018. The report provides an in-depth assessment of the impacts of the Section 301 tariffs over the last four years on U.S. imports of apparel, footwear, travel goods and furniture imported from China. It is based on U.S. government data amplified by responses to a December 2022 survey of American companies sourcing those goods from China.
The study makes three key findings:
1) The negative impact of the tariffs – higher costs and higher prices – fell on U.S. companies and American families;
2) The tariffs have led to a host of significant indirect costs, including those associated with attempts to establish bifurcated supply chains; and
3) Increased prices on consumer goods have had a greater negative impact on American households for which those goods represent greater shares of household income: households in the lowest 20% of income groups; minority-headed households, and households headed by individuals without a college education. Tariffs on U.S. imports of apparel, footwear and travel goods, in particular, are among the highest in the U.S. tariff code, even absent the Section 301 duties on U.S. imports from China. For example, U.S. MFN duties on low-value and children’s footwear are much higher than those on other types of footwear. The Section 301 duties add considerably – sometimes up to 25% — to this tariff burden for products imported from China.
To put it in perspective, the tariffs most heavily impacted U.S. imports from China of waterproof footwear. The tariffs imposed an annual direct cost on U.S. importers of over $250 million, escalating every year to over $450 million in 2022. No footwear tariff exclusions were granted to mitigate the negative impacts of the tariffs on footwear sourcing companies. According to Mercatus Center, every one of the 442 footwear product exclusion requests filed was denied.
Access the study here and additional findings on social media with #TariffsHurt.
Related, an International Trade Commission report from October 2022 highlighted that “the disproportionate impacts of tariffs on U.S. workers as consumers” including the “discriminatory effect on female workers, because tariff rates are much higher on women’s clothing than on men’s clothing.”