The escalating trade war between the United States and China has meant that U.S. outdoor recreation businesses have paid $1.5 billion more in tariffs over the last 10 months (September 2018 to June 2019) compared to the same period a year ago, according to Outdoor Industry Association (OIA).
New data released by OIA was derived from figures compiled by the U.S. Census Bureau and captures an increase in tariffs from 10 percent to 25 percent on $200 billion of Chinese imports that took effect in May.
A variety of outdoor recreation equipment including backpacks, camp chairs and bicycles are saddled with the 25 percent punitive tariffs, causing the average tariff rate on outdoor equipment to more than double from the previous year.
This additional $1.5 billion in tariffs – paid by U.S. companies and not the Chinese – is a massive burden on businesses, large and small, throughout the country. Employers are needing to hold off on filling jobs, expanding facilities and developing new products due to the economic strain the tariffs are having on their operations.
“The numbers don’t lie. America’s outdoor businesses are paying an extra $1.5 billion in tariffs that are going straight into a bureaucratic black hole instead of being reinvested in jobs, lower prices and new products,” said Patricia Rojas-Ungar, vice president of government affairs at Outdoor Industry Association. “This flawed tariff-focused trade strategy is hurting the hardworking Americans who depend on a robust outdoor recreation economy and doing nothing to finalize a trade deal. We urge the Trump administration to find an alternative approach to achieve success in its negotiations with China.”
Despite the economic hardship the existing punitive tariffs are having on American businesses and consumers, the Trump administration today issued the new list of Chinese imports worth $300 billion that will be subject to a 10 percent tariff starting on September 1, with another group of products facing the 10 percent tariff on December 15.
The OIA analysis indicates that if those tariffs go into effect, $8.5 billion in outdoor products, including nearly all outdoor apparel, footwear and equipment imported from China, will face the new 10 percent tax. Many of the products on the new tariff list already face high tariffs. For example, a polar fleece jacket from China is already subject to a tariff of 32 percent, and a pair of hiking boots faces a 37.5 percent tariff. Both will increase by another 10 percent when the new round of tariffs goes into effect, costing outdoor companies and consumers hundreds of millions of dollars in new tariffs every month.
If the latest round of tariffs go into effect, many American outdoor industry manufacturers and retailers may be forced to eliminate products, cut jobs or go out of business altogether, and consumers will feel the impact as a result of higher prices on the equipment, footwear and apparel they need to get outside.
OIA will continue to update and release the industry’s tariff payments as the U.S.-China trade war wears on, in order to ensure American consumers are aware of the real impacts of an escalation strategy rather than talks and diplomacy. Stay tuned for more info, but it remains our hope that a trade deal can be reached and that all punitive tariffs will be removed.
Photo courtesy OIA