AAFA worried about increased tariffs on Chinese apparel imports

China “cheats” and “we won’t let it flood our market,” said US president Joe Biden on May 14, to justify quadrupling customs duties on Chinese electric vehicles, imposed alongside tariff rises on other goods. Among them, a wide range of textile and apparel products, a cause of concern for the American Apparel & Footwear Association (AAFA).

“The decision to extend Section 301 tariffs on a wide range of apparel, footwear, accessories, and textiles — while not unexpected — is a real blow to American consumers and manufacturers alike,” said Steve Lamar, CEO of AAFA. “Tariffs are regressive taxes that are paid by US importers and US manufacturers and ultimately passed along to US consumers. At a time when hard-working American families are struggling with inflation, continued tariffs on consumer necessities are entirely unwelcome,” he added.

According to AAFA, the decision is even more unjustified given that the Biden administration has reportedly admitted that the same tariff policy failed to produce the desired effects in the last few years. In 2019, the US government brought customs duties on textile and apparel imports from China back down from 15% to 7.5%. A policy reversal that seems to have caused only a minor slow-down for some import categories, while others have prospered, eventually prompting the Biden administration to backtrack.

“Ending this relief rather than making it permanent puts manufacturers and their workers at a significant disadvantage and adds further inflationary pressures,” said Nate Herman, AAFA senior vice president of policy. According to AAFA, the decision was prompted by the US government’s failure to negotiate a new trade deal with China. A situation that “underscores the Biden administration’s lack of an effective trade policy agenda,” said Beth Hughes, AAFA vice-president of trade and customs policy.

In 2022, textile and apparel imports into the USA were worth $132.2 billion, exceeding the figure of $127.7 billion recorded in 2019. China was by far the leading supplier country, its export value up slightly to $32.7 billion, with a 24.7% market share.

Economic and symbolic issue

The decision announced by Biden places economic competition with China at the heart of the US presidential campaign, with a special emphasis on the automobile market, which is of high symbolic value in the US at election time.

“We will never let China control the market for this kind of vehicle,” said Biden on Tuesday, speaking to the press at the White House. He took the opportunity of lambasting on this issue his Republican rival Donald Trump, with whom he will be competing in the industrial states that could hold the key to the election, like Pennsylvania and Michigan.

The value of List 4A imports from China, which include textiles and apparel, has dropped only slightly since the 7.5% tariff was introduced, according to AAFA – US Trade Representative

It is “impossible for our car manufacturers to compete honestly [with China],” said Biden. The US president has on many occasions showed his support for the US automotive industry, helping its electric transition with the Inflation Reduction Act’s focus on green energy, and by backing the industry’s trade union.

In a press release, steelworkers union USW has hailed the White House’s decision, which it deems necessary to “support domestic manufacturing and our workers.”

Trump favours tariff rises

Trump, speaking after his New York court hearing, waxed sarcastic about a decision he believes is entirely consistent with those he took during his stint as president.

Biden “wants to set high customs duties on Chinese imports, which is exactly what I proposed. Where have you been in the last three and a half years?” Trump rhetorically asked his successor.

“My predecessor failed to protect the USA,” countered Biden, adding that Trump “wants to raise all customs duties, he simply has no clue.”

Trump has indeed made a generalised rise in customs duties one of the main platforms of his economic programme should he be re-elected, assuring the country that he would counterbalance its effects on US consumers by tax cuts, financing the latter via the new revenue streams from customs duties.

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Misguided actions” says China

China was swift to react. In a statement, the country’s Trade Minister denounced a decision that “will severely affect the climate of bilateral cooperation,” calling on the USA to “immediately reconsider their misguided actions, and cancel the extra tariffs imposed against China.”

Beijing expressed strong disapproval, underlining how “the WTO indicated a long time ago” that the US tariffs “are in breach of its rules,” but “the USA keep persisting in their mistakes.”

The US government has in turn accused China of vigorously bolstering its manufacturers in certain strategic sectors, granting major subsidies that lead to excess supply which is then sold at knock-down prices on the global market, preventing other countries from competing.

The US government emphasised that this concern is shared by the European Union and other countries like Turkey, Brazil and India.

(with AFP)