Tariff Foes Say Retailers Reworking Orders to Deal With Threat

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(Bloomberg) -- The Trump administration’s threatened tariffs against goods made in China are already having a real impact, according to the American Apparel & Footwear Association.

Retailers plan their products an average of six to nine months in advance, and they’re already preparing for the potential levies to be in place, AAFA Chief Executive Officer Rick Helfenbein said in an interview. Who could be affected? “Everybody,” he said.

“We’re hearing loud and clear people are trying to move their production,” Helfenbein said. “If I’m going to get slaughtered, I’m moving my goods now.”

That means even if the tariffs don’t materialize, damage may have been done, he said.

Other countries taking on increased production will likely also raise prices because they have limited capacity and because Chinese manufacturing may become more expensive.

“If this is all bluster, what did you achieve?” Helfenbein said. “You’re creating an inflationary reaction through a threat.”

A coalition of more than 100 diverse business groups, of which the AAFA is a member, argues that the proposed tariffs on $150 billion in Chinese goods are counterproductive to the goal of holding Beijing accountable for intellectual property theft and other trade practices. They’re seeking to keep specific products off a list of more than 1,300 items targeted for tariffs -- and trying collectively to keep levies from being imposed at all.

Much Discussed

Tariffs are a main discussion among caucus meetings on Capitol Hill, said AAFA Executive Vice President Steve Lamar. While members of Congress agree that tariffs are taxes and will cause prices to rise, many have also been hesitant to join the coalition’s fight publicly, hoping the conflict with China can be resolved with minimal disruption to the U.S. economy, he said.

The AAFA estimates that a family of four will spend $500 more annually on consumer products like clothes and shoes, should an additional 25 percent duty be applied to Chinese imports.

Designers such as Joseph Altuzarra and retail executives like Manny Chirico, CEO of Tommy Hilfiger owner PVH Corp., gathered last night at a dinner in New York City to raise money for the Council of Fashion Designers of America Foundation. They peppered AAFA staff with questions about tariffs.

“We’re not used to these kind of issues,” Helfenbein said. “We’re used to running our businesses.”

©2018 Bloomberg L.P.

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