Outdoor businesses are running out of 'wiggle room' with tariffs as trade war escalates

Brands are trying to keep up as duties on Chinese imports seem to change moment by moment.
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Mockups of Columbia and Black Diamond hangtags with tariff costs

Brands like Black Diamond and Columbia Sportswear Company created mock-up hangtags as away to educate policymakers on the impacts of tariffs during the 2019 Capitol Summit in April.

Columbia Sportswear Company's great hope is that consumers never have to think about  a tariff, Chief Administrative Office Peter Bragdon said. But the trade war with China doesn't seem to be cooling anytime soon and tariffs are top of mind for many outdoor businesses. 

"Enough with the shoot from the hip trade war tactics, this last-minute tit-for-tat escalation of tariffs is hurting our consumers and businesses," Outdoor Industry Association's Patricia Rojas-Ungar wrote.

On Friday, President Donald Trump in a series of Twitter posts urged companies to pull business from China. His posts came after China said it is increasing tariffs on $75 billion worth of American goods as retaliation for Trump's newest round of tariffs on Chinese imports. A 10 percent tariff was raised to 25 percent, and then Trump insisted on another 10 percent on another batch of goods. He also threatened a hike to 30 percent tariffs.

"Our great American companies are hereby ordered to immediately start looking for alternative to China, including bringing your products home and making your products in the USA," Trump wrote in his Friday series. Then this weekend, Trump backed off his own threats. 

In testimony to the United States Trade Representative, outdoor companies have repeatedly expressed how complex it is to change their supply chains. It can't happen overnight or even in a few weeks. Some companies, like Hestra, were already in the process of transitioning out of China and others are now considering moving.

For other companies, like Boulder-based Cusa Tea, it's impossible. "We have worked in tandem with an amazing botanical extraction company to modify their technology and use it to make the only instant tea product that actually tastes better than loose leaf tea," Owner Jim Lamancusa said. "We have deep relationships with organic tea farmers that have been built over many years and tea isn’t native to America even if we did want to grow it here. We just don’t have the ideal climate for tea growing. 

Lamancusa continued, "Lumping all companies into one bucket is very disappointing to hear from this administration. I recognize that this is a very complicated issue, but what I see as a result at this point is that these policies are leading us into a global recession and making the world less connected. We are now a global economy and these policies are threatening to create a more ethnocentric and dangerous planet."

Businesses and retail trade associations across industries have united to educate the public on how the tariffs hurt American consumers, not China. Brands like Columbia and Black Diamond tried to get politicians to understand in April, using mock-up visual aids during the Outdoor Industry Association Capitol Summit. 

For example, before the tariffs, a $100 Columbia jacket already had a 32 percent duty. On top of that, Columbia customers will pass down another 25 percent.

"Everything from jackets to backpacks to hiking boots will see increases in tariffs of up to 30 percent," Rojas-Ungar said. "American outdoor industry businesses are running out of wiggle room and are being forced to make drastic decisions–from hiring fewer new employees to closing—this has to stop and real trade negotiations need to begin in earnest."

Since September 2018, tariffs have cost the outdoor industry $1.5 billion, and with more rounds slated for next month and December, the dollar total will rise. Bragdon said it's been difficult to keep track of tariff policies, since Trump makes changes so frequently.

The only bright spot to the trade war is educating the public on tariffs and shedding light on their ongoing impact to business and consumers, he said. Columbia's imports from China into the U.S. are between 10 to 15 percent of the overall business. However, it could mean that some products are phased out or are made with different features in the future.

"Congress can bring this all to an end tomorrow if they wanted to," Bragdon said. "It's in their power to do it."

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