The U.S. footwear industry cannot decouple from China.
Release time:
02 Sep,2019
“China is the United States’ leading supplier of footwear; the U.S. imports roughly 2.3 billion pairs of shoes annually, with 70 percent originating from China. Manufacturers and consumers in both countries are victims of the U.S. government’s tariff policies—no party stands to gain,” said Matt Priest, president of the Footwear Distributors and Retailers of America, in a recent media interview.
The U.S. Shoe Wholesalers and Retailers Association has more than 500 member companies, representing 90% of U.S. footwear manufacturers. Priest said, “Since the outbreak of U.S.-China economic and trade tensions, there has been persistent talk in the United States about the possibility of decoupling the two economies. From the perspective of the U.S. footwear industry, such a decoupling is entirely unimaginable. China boasts an ample labor force and robust manufacturing capacity, and a strong supply chain has been established between the two countries. It is simply not feasible for the U.S. footwear industry to decouple from China—this is a fundamental reality.”
“The U.S. government repeatedly claims that ‘China will foot the bill for the tariffs,’ but this is clearly not true; ultimately, the tariffs will be passed on to American consumers,” Priest said. In the 1930s, the Hoover administration enacted the Smoot-Hawley Tariff Act, sharply raising import duties on more than 20,000 foreign products in an attempt to reduce imports and clear domestic inventory surpluses. This triggered a global trade war and caused U.S. exports to plummet. It is widely regarded as one of the factors that plunged the United States into the Great Depression and brought catastrophe to the entire world. History may be repeating itself today. “Imposing additional tariffs will drive up prices, leading to reduced demand, lower sales, shrinking profits, and inflation. These tariffs will harm the U.S. economy’s outlook and weigh on the global economy.”
This is not just Priest’s concern. On August 28, a coalition of more than 160 U.S. business organizations jointly sent a letter to the U.S. government, urging a delay in imposing additional tariffs on Chinese exports to the United States. They argued that such tariffs would harm American workers and consumers and have a negative impact on the U.S. economy. Meanwhile, the U.S. investment bank Goldman Sachs recently released a report stating that the uncertainty caused by the trade war could push the U.S. economy into a recession.
Priste previously served as the Assistant Deputy Secretary for Textiles and Apparel at the U.S. Department of Commerce. “Business development requires a stable policy environment and policy predictability. Unfortunately, I see no coherent policies from this U.S. administration; today’s statements may be entirely different from tomorrow’s. Under these circumstances, how can we engage in long-term business planning? This uncertainty severely hinders the growth of U.S. businesses.”
Priest told reporters that he has visited China 25 times and has established strong cooperative relationships with Chinese partners. He believes that China’s market economy is steadily improving, and the positive progress made in areas such as intellectual property protection and market access is evident to all.
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