In 2018, then US President Trump imposed new tariffs on various Chinese made goods, including baseball caps, suitcases, and shoes – and Americans have been paying the price ever since.
Tiffany Zafas Williams, the owner of a luggage store in Lubbock, Texas, said that small suitcases priced at $100 before Trump’s customs duties are now selling for around $160, while a walk-in case priced at $425 is now selling for $700.
As an independent small retailer, she has no choice but to increase prices and pass on these to consumers, which is really difficult.
Tariffs are not the only reason for price increases in the past five years, but Zaffas Williams said she hopes President Biden can lift tariffs – which he had previously criticized – to help alleviate some of the pressure on rising prices.
Biden posted on social media in June 2019, saying, “Trump has no basic knowledge. He thought tariffs were paid by China. Any first-year economics student can tell you that the American people are paying his tariffs.”
But after announcing the results of the multi-year review of these tariffs last month, the Biden administration decided to maintain the tariffs and increase the import tax rate for a relatively small share, including products such as electric vehicles and semiconductors produced in China.
The tariffs retained by Biden – paid by US importers instead of China – involve approximately $300 billion in goods. Moreover, he plans to increase taxes on approximately $18 billion of these goods over the next two years.
The supply chain problems caused by the COVID-19 and the Russia-Ukraine conflict are also the reasons for the rising inflation. But shoe and clothing trade groups say that imposing tariffs on Chinese goods is undoubtedly one of the reasons for price increases.
When Chinese made shoes arrive at ports in the United States, American importers such as shoe seller Peony Company will pay tariffs.
The company’s president, Rick Muscat, said that Peony is known for selling shoes to retailers such as Jessie Penny and Macy’s, and has been importing most of its footwear from China since the 1980s.
Although he hoped to find American suppliers, various factors, including earlier tariffs, led to the majority of American shoe companies shifting overseas.
After Trump’s tariffs came into effect, some American companies began searching for new manufacturers in other countries. Therefore, according to a report written for clothing and footwear trade groups, China’s share of total shoe imports from the United States has decreased from 53% in 2018 to 40% in 2022.
But Muscat did not change suppliers because he found that transferring production was not cost-effective. Muscat said that Chinese people are “very efficient in their work, they can produce better products at lower prices, and American consumers value this.”.
Phil Page, the chairman of the American Hatter Company headquartered in Missouri, also raised prices due to tariffs. Before the trade war under Trump began, most of the products of American hat companies were imported directly from China. Page said that as soon as tariffs take effect, some Chinese manufacturers hastily transfer to other countries to avoid US tariffs.
Now, some of his imported hats are manufactured in Vietnam and Bangladesh – but not cheaper than those imported from China. Page said, “In fact, the only effect of tariffs is to disperse production and cause billions of dollars in losses to American consumers.”
Nate Herman, Senior Vice President of Policy at the American Apparel and Footwear Association, said that these tariffs “have certainly exacerbated the inflation we have witnessed in the past few years. Obviously, there are other factors, such as supply chain prices. But we were originally a deflationary industry, and the situation changed when tariffs on China came into effect.”.
Post time: Jun-28-2024