China doesn’t pay the tariffs. American businesses and consumers do.
The Big Picture
On August 18, 2017, the Trump administration initiated a Section 301 investigation “to determine whether acts, policies, and practices of the Government of China related to technology transfer, intellectual property, and innovation are unreasonable or discriminatory and burden or restrict U.S. commerce.”
Since that time, the administration has threatened or imposed punitive tariffs on $550 billion worth of U.S. imports from China. As the source of 42% of apparel, 69% of footwear, and 82% of travel goods sold in the U.S. market, this move has been described as an existential threat to the industry.
Current State of Play
Currently, members are being hit with a 25% punitive tariff on items included in three lists released by the administration since early 2018 – also known as “Tranches 1-3” that together total $250 billion worth of U.S. imports from China. Products identified on these lists include leather apparel, hats, accessories, textiles, travel goods (handbags, backpacks, luggage), and hangers. These punitive tariffs are in addition to tariffs that were already in place for these products.
The administration also moved forward with a 15% punitive tariff on a "Tranche 4" list of products including shoes, clothes, and all remaining U.S. imports from China totaling $300 billion worth of imports. This list was later split in two, with tariffs beginning implemented on September 1, 2019 (Tranche 4A) and December 15, 2019 (Tranche 4B).
On December 13, the administration announced a "Phase One" deal had been reached with China that would lower the punitive tariff on Tranche 4A to 7.5%, and would cancel plans to implement Tranche 4B.
Find AAFA letters and testimony to the administration, as well as press statements, in our News room. Follow us @apparelfootwear and on LinkedIn for our latest announcements and press interviews.
How to Engage
We encourage all members to take the following steps:
- Contact Congress: It is essential that all members contact their representatives to emphasize how punitive tariffs will impact your business and American jobs. Members can also encourage representatives to pass legislation to rein in the Executive Branch’s tariff making abilities. AAFA has form letters available in our Legislative Action Center that can be sent today. Additionally, AAFA can facilitate in-person meetings with representatives in Washington.
- Apply for tariff relief: The administration is accepting applications for tariff relief through the Miscellaneous Tariff Bill (MTB) process and the Tranche 4A exclusion process (portal opens October 31, 2019). Information on these processes is available via this AAFA member-only webinar.
- Utilize AAFA support materials: AAFA has developed several supporting materials for members trying to keep up with the latest tariff actions and for those looking to diversify supply chains. The following materials and groups require an AAFA membership:
We're very proud to be a part of the AAFA. You guys are doing a tremendous job representing our industry. Thank you very much for all your hard work." - Morris Hidary | M. Hidary & Co.
AAFA's sourcing profiles have been incredibly instrumental to the work we do every day. I can't overstate how critical AAFA has been in helping us keep up with the trade war." - Jennie McCarthy | GIII Apparel
Not an AAFA member? Sign up for the open-industry AAFA Weekly Brief and contact firstname.lastname@example.org to learn how to join and to gain access to member-only resources and committees.