China “cheats” and “we won’t let it flood our market,” said US president Joe Biden on May 14, to justify quadrupling customs duties on Chinese electric vehicles, imposed alongside tariff rises on other goods. Among them, a wide range of textile and apparel products, a cause of concern for the American Apparel & Footwear Association (AAFA)

However, now the American Apparel & Footwear Association (AAFA) has launched a fresh offensive against the continued imposition of tariffs on apparel and footwear imports, arguing that they are placing an undue burden on both American consumers and businesses. The AAFA's campaign comes amid rising inflation concerns in the US, with apparel prices growing almost 6.8 per cent year-on-year in March 2024, as per the Bureau of Labor Statistics.

“These tariffs are a relic of the past that are hurting American families and businesses,” said Steve Lamar, President and CEO of the AAFA, in a statement. “American consumers are already facing higher prices at the grocery store and the gas pump, and these tariffs are only making things worse."

AAFA not in favour of tariff continuation

In a press release, AAFA titled "Apparel and Footwear Industry Reacts to Report That Will Only Lead to Greater Inflation," Lamar called the move a "real blow" to both American consumers and manufacturers. The AAFA's argument is echoed by industry experts. Retail industry analyst Mark McCrary pointed out tariffs are essentially a tax on American consumers, as the added import costs are often passed down the line to shoppers. “These tariffs are not protecting American jobs,” McCrary said. “In fact, they are likely leading to job losses as consumers cut back on their spending due to higher prices.”

Further frustration stems from the perceived ineffectiveness of the tariffs. As per AAFA, the Biden administration itself has acknowledged that these tariffs have failed to achieve their intended goals. The AAFA release points out similar tariffs were lowered in 2019 with minimal disruption, suggesting alternative approaches might be more successful. In 2022, textile and apparel imports into the US were worth $132.2 billion, exceeding the figure of $127.7 billion recorded in 2019. China was by far the leading supplier country, its export value up slightly to $32.7 billion, with a 24.7 per cent market share.

President Biden himself has acknowledged the negative impact of tariffs on consumers. In a recent address, he stated, "We are working to address the issue of tariffs and bring relief to American families. We understand that these tariffs are contributing to inflation, and we are committed to finding solutions that will lower prices for everyday goods.”

The AAFA is urging the Biden administration to remove the tariffs on apparel and footwear imports. The association argues that doing so would help to lower prices for consumers, boost the US economy, and create jobs in the retail sector.

Statistics to support AAFA's claims

The AAFA estimates that tariffs on apparel and footwear cost American consumers an additional $12 billion annually.

A 2023 study by the Peterson Institute for International Economics found that tariffs on imported goods from China cost American businesses $62 billion in 2020.

The National Retail Federation estimates that removing tariffs could save American consumers an average of $135 per year.

The National Retail Federation estimates that tariffs on apparel and footwear cost American consumers an additional $18 billion per year. Similarly, the American Chamber of Commerce estimates that tariffs have led to the loss of 200,000 jobs in the retail sector. The US apparel and footwear industry supports over one million jobs.

AAFA says, the continued tariffs are not only hurting consumers but also placing a strain on American businesses. Many apparel and footwear companies are struggling to absorb the increased costs of imported goods, which is leading to lower profit margins and reduced investment. Some companies have been forced to lay off workers or raise prices to consumers in order to stay afloat.

The AAFA's campaign to remove tariffs on apparel and footwear is gaining momentum. With rising inflation concerns and the upcoming midterm elections, the issue is likely to receive increased attention from policymakers in the coming months. It remains to be seen whether the Biden administration will heed the AAFA's call and take steps to lower prices for American consumers.

However, removing the tariffs could also have negative consequences. Some domestic manufacturers argue that eliminating tariffs would put them at a competitive disadvantage against foreign producers who benefit from lower labor costs.

The Biden administration faces a delicate balancing act as it weighs the competing interests of consumers, businesses, and domestic manufacturers. The AAFA's latest campaign is sure to add pressure on the administration to take action to address the issue of tariffs.