(UTV|COLOMBO) – Some of the world’s biggest footwear firms are urging Donald Trump to end the US trade war with China, warning of a “catastrophic” effect on consumers.
A letter signed by 173 companies, including Nike and Adidas, says the president’s decision to raise import tariffs will affect the working class.
They also warn that higher levies threaten the future of some businesses.
Mr Trump says that the trade deficit with China hurts the US economy.
The US president increased levies on $200bn (£157.3bn) worth of Chinese imports into the US from 10% to 25% more than a week ago after Washington and Beijing failed to reach a deal on trade.
China retaliated by announcing plans to raise levies on $60bn of US imports from 1 June.
The footwear companies that signed the letter, including Clarks, Dr Martens and Converse, say that while the average US tariff on footwear is 11.3%, in some cases it can reach as high as 67.5%.
“Adding a 25% tax increase on top of these tariffs would mean some working American families could pay a nearly 100% duty on their shoes,” the companies wrote.
“This is unfathomable.”
“It is time to bring this trade war to an end,” the firms urged.
When he raised tariffs earlier this month, Mr Trump told companies that they could reduce costs by shifting production to the US.
However, the shoemakers and retailers say that while they have been moving their sourcing away from China: “Footwear is a very capital-intensive industry, with years of planning required to make sourcing decisions, and companies cannot simply move factories to adjust to these changes.”
Retaliation fears
On Tuesday, a top business lobby in China released a survey of its members that found just over 40% had relocated, or were considering moving production facilities, outside of China because of tariffs.
The survey by the American Chambers of Commerce in China and Shanghai found one-third of respondents had delayed or cancelled investment decisions to cope with tariffs.
A recent escalation in the trade conflict – including tighter restrictions on Chinese telecoms giant Huawei – was creating fresh concerns for businesses in China, the group said.
Last week, the Trump administration added Huawei to its “entity list”, which bans the company from acquiring technology from US firms without government approval.
Speaking to the BBC, the chairman of the American Chamber of Commerce (AmCham) in China, Tim Stratford, said its members had “real concerns” about the fallout from the US action against Huawei. (Courtesy: BBC)
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