The fate of fashion in the trade war
Hearings before the U.S. Trade Representative continued today as businesses spoke on the impact their industries will face if the next batch of Chinese tariffs are put into place by the White House. Called the Section 301 tariffs, the 25 percent taxes are aimed at another $200 billion worth of Chinese imports. On the list this time: apparel, handbags, backpacks — enough items to have the American fashion industry very concerned. Julia Hughes, the president of the United States Fashion Industry Association, testifies tomorrow. The following is an edited transcript of her conversation with Marketplace host Kai Ryssdal.
Kai Ryssdal: My guess is that those tariffs, should they be imposed, will show up on consumers of clothing more quickly than they will on anything else. What’s your sense of that?
Julia Hughes: I totally agree with you. And, you know, the initial tariffs, companies pay that duty first. But when you start getting to consumer products, like what’s on the list that we’re talking about tomorrow — apparel products, handbags, backpacks, everything that families are buying right now for back to school — you’re going to see those prices rise a little bit faster if the administration follows through on this threat to impose 10 percent or 25 percent tariffs on the imports.
Ryssdal: How dependent is the American fashion industry on China? I mean, couldn’t you just go somewhere else and get this stuff?
Hughes: That’s a great question, and obviously companies aren’t dependent on just one country for everything. But what’s happened in the textile and apparel industry is there’s a lot of products that are only made in China and that are predominantly made in China. Almost every company has some business that’s in China today, because China is the global center for textile and apparel production, not just to the U.S. market.
Ryssdal: So there’s case to be made by the administration that there has been intellectual property theft and there has been forced technology transfer. I wonder though whether you believe you will be heard by the USTR when you bring a message that is not related to those things but is related to direct consumer items and the tariffs and the effect those will have?
Hughes: The fact is tariffs aren’t a great solution because American consumers and American companies pay the tariffs. The Chinese don’t. There’s other ways to do it. And really, we look at the more global approach. The ideal would be let’s use the World Trade Organization and let’s use the close relationships that we have with our allies in the E.U. and Canada and other countries to work with China and find specific criteria, specific accomplishments to end some of these practices.
Ryssdal: Yeah, fair enough. Last question and then Ill let you go. I’m sure you saw the other day that the president told Reuters he’s got no timeline for ending this thing and he doesn’t have high hopes for these Chinese negotiations that are happening in Washington this week. What happens if this doesn’t go away?
Hughes: I’d like to be optimistic, and I think that there’s a path forward. And what I’d like to hope we see is a pause put on the implementation of these retaliatory tariffs until there’s a chance to have serious negotiations. Can we have a summit? Can we have a Xi JinPing-Donald Trump summit in November when there are two opportunities for the leaders to meet? We’re looking for solutions, not just for penalty tariffs.
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