The U.S. footwear industry cannot decouple from China.
Release time:
02 Sep,2019
“China is the United States’ largest supplier of footwear. The U.S. imports roughly 2.3 billion pairs of shoes each year, with 70 percent coming from China. Both U.S. and Chinese manufacturers and consumers are victims of the U.S. government’s tariff policies—no party stands to gain from them,” said Matt Priest, president of the U.S. Footwear Wholesalers and Retailers Association, in a recent media interview.
The American Footwear Distributors and Retailers Association has more than 500 member companies, accounting for 90% of U.S. footwear manufacturers. Priest said, “Since the outbreak of U.S.-China economic and trade tensions, there has been a persistent discourse in the United States about the possibility of decoupling the two countries’ economies and trade. From the perspective of the U.S. footwear industry, such decoupling is simply unimaginable. China boasts an abundant labor force and robust manufacturing capacity, and a strong supply chain has been established between the U.S. and China. It’s a fundamental fact that the U.S. footwear industry cannot decouple from China.”
“The U.S. government has repeatedly claimed that ‘China will foot the bill for the tariffs,’ but this is clearly not true—ultimately, these 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 tariffs on more than 20,000 foreign goods in an attempt to reduce imports and clear domestic inventory buildup. This move triggered a global trade war and caused U.S. exports to plummet. It’s widely regarded as one of the key factors that plunged the United States into the Great Depression and brought catastrophic consequences to the entire world. A historical scenario could well be repeating itself today. “Imposing additional tariffs will drive up prices of goods, which in turn will lead to reduced demand, lower sales volumes, declining profits, and inflation. These additional tariffs will harm America’s own economic prospects and have repercussions for the global economy.”
This is not just a concern for Priest. On August 28, a coalition of more than 160 U.S. business organizations jointly sent a letter to the U.S. government, calling for a delay in imposing additional tariffs on Chinese goods exported to the U.S. They argued that these additional tariffs would harm the interests of American workers and consumers and have a negative impact on the U.S. economy. Recently, the U.S. investment bank Goldman Sachs released a report stating that the uncertainty brought about by the trade war could push the U.S. economy into a recessionary cycle.
Priest previously served as Deputy Assistant Secretary for Textiles and Apparel at the U.S. Department of Commerce. “The development of commerce requires a stable policy environment and predictable policies. Unfortunately, I see no coherent policy coming from this U.S. administration—today’s statements may be completely different from tomorrow’s. Under these circumstances, how can we possibly engage in long-term business planning? This uncertainty is severely hindering the growth of U.S. businesses.”
Priest told reporters that he had visited China 25 times and established strong cooperative relationships with Chinese partners. He believes that China’s market economy is becoming increasingly sophisticated, and the positive progress it has made in areas such as intellectual property protection and market access is evident to all.
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