Rich Harper, Outdoor Industry Association's (OIA) international trade manager, hosted a webinar on Thursday to discuss how the tariffs on imports from China will impact the outdoor industry. He was joined by Dan Neumann and Ron Sorini, outside trade counsels from Sorini, Samet & Associates. Here are five things to know about the trade war.
1. The tariffs are a tool to compel China to negotiate.
Following the U.S. Trade Representative's findings that China's policies coerce American companies into transferring their technology and intellectual property to domestic Chinese enterprises, President Donald Trump has imposed a number of rounds of tariffs as punishment. The tariffs are designed to compel China to come to the negotiating table. But so far, China keeps retaliating with their own tariffs. Harper said, "Little progress has been made so far," which is why Trump keeps coming down with more tariffs.
Note: These tariffs are different than the ones on steel and aluminum, which were imposed in March in the interest of national security.
2. A number of outdoor products are impacted—and the consequences are big.
When the Trump Administration imposed $34 billion in tariffs in July and $16 billion in August, outdoor products were spared. But in this third round of tariffs—worth $200 billion—a number of outdoor products made the list, including travel goods, backpacks and sports bags, leather ski gloves, helmets and other headwear, outdoor stoves, bicycles and parts, kayaks, compasses, camp furniture, and more. The list also includes raw materials—such as wool yarn—that put domestic sock manufacturers at a disadvantage because wool socks are not on the list.
"We're looking at a significant blow to the $887 billion outdoor recreation economy and the 7.6 million American jobs that it effects if these tariffs do go into affect," Harper said.
This all means that businesses are either going to absorb costs or pass costs on to consumers, sacrifice quality and innovation for lower prices, shift production out of China, discontinue product lines, or even go out of business.
Note: If businesses ship products one by one from China to the U.S., these tariffs currently don't apply. But it's possible that they will apply in the future, since it's seen as a loophole.
3. While OIA opposes the tariffs, the association is a proponent of working things out with China.
OIA is fighting to sway the Trump Administration to exclude outdoor products from the final list. But ultimately, OIA also wants to see the U.S. address unfair IP practices with China because China's access to intellectual property leads to knockoff products—a bad thing for business.
4. This is not the end.
In fact, there might even be a fourth round of tariffs—another $200 billion in goods if China retaliates to the third round. And it's likely that apparel and footwear will be named. Right now, it's unclear if any products will be eliminated from the final list and when tariffs will be implemented. It could be within the next few weeks or the next few months. "We're not at the end of it by any means," Harper said.
5. There's still time to speak up.
Brands are encouraged to share their stories with Harper and join him in Washington D.C., and also to sign coalition letters opposing the tariffs, and to reach out to their representatives in Congress and invite them to their facilities.
"Ultimately, they want to hear from you directly about the impact this will have on businesses and jobs in their state," Harper said.
Reach Harper at email@example.com.