Sneaker makers and retailers tell Trump a shoe tariff would be catastrophic

Darnell Taylor
May 22, 2019

"Any action taken to increase duties on Chinese footwear will have an immediate and long-lasting effect on American individuals and families", a coalition of more than 170 footwear companies said in a letter to Trump.

China said Monday that it never agreed to the "extravagant demands" US negotiators made during April negotiations meant to solidify a trade deal between the world's two largest economies.

Apple Inc shares fell 3.3 percent, hurt by a warning from financial-services company HSBC that higher tariffs on Chinese goods would force the tech company to raise prices, with "dire consequences" on demand for its products.

In Beijing, Chinese Foreign Ministry spokesman Lu Kang said he didn't know what Trump was talking about.

The reason the last round of China-US talks did not reach an agreement is that the US tried "to achieve unreasonable interests through extreme pressure", Lu said. Mr. Trump also proposed an expanded round of tariffs on what's effectively the remainder of Chinese imports of about $300 billion.

However, the shoe-makers 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 can not simply move factories to adjust to these changes".

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The U.S. earlier this month increased tariffs from 10% to 25% on $200 billion worth of Chinese goods.

The US restrictions on Huawei began to bite hard on Monday.

Adding to US-China tensions, the US military said one of its warships sailed on Sunday near the disputed Scarborough Shoal, which is in the South China Sea and which is claimed by China.

The trade war between the two countries has heated up just ahead of next month's G-20 summit in Japan, where President Trump plans to meet with Chinese president Xi Jinping.

Canada and the US reached a deal Friday to lift those tariffs and they were physically removed today.

Trump, who said the interview with Fox News host Steve Hilton had taken place two days after he raised the tariffs, said he would be happy to simply keep tariffs on Chinese goods, but that he believed China would eventually make a deal with the United States "because they're getting killed with the tariffs".

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