Shock waves of Trump China tariffs hit elite U.S. outdoor industries

Updated 2018-04-02 08:41:04 Xinhua

The far-reaching effects of the Trump administration's threat of a trade war with China have even hit the tony enclave of Aspen in the central U.S. state of Colorado, 3,200 km west of Washington.

"WE ARE NOT HAPPY"

Trump has planned to impose unilateral tariffs on up to 60 billion U.S. dollars worth of a wide range of consumer goods imported from China.

But this Saturday, Aspen, the internationally renowned ski resort town where the median home costs 4.7 million dollars, looks to be hit by the president's move. Local business owners, who are reeling from the worst snow season in 30 years, told Xinhua that "nothing good" will come from the planned tariffs.

"We aren't happy," Aspen business owner Dean Holman told Xinhua, "Our margins are tight enough and now our cost of goods is about to go up."

Hamilton Sports is located across the street from the Silver Queen Gondola on Aspen Mountain and entertains an upscale crowd, who Saturday were browsing Kastle, Head, Blizzard, Volkl and Rossignol skis.

"Trump thinks he's helping create a level playing field, but all he's doing is hurting Americans," shopper Andrea Clemmons told Xinhua.

"One of the reasons we have survived is great returning clientele year after year," Miller said, adding that they are concerned the proposed tariffs will drive customers away.

The whole outdoor recreation industry, which comprises 2 percent (373.7 billion dollars) of the entire 2016 U.S. Gross Domestic Product according to the federal Bureau of Economic Analysis, has smelled the odor.

In anticipation of Trump's decision, the Outdoor Industry Association (OAI) sent a letter in March, also signed by Snowsports Industries America and 40 other trade associations, citing adverse impacts of Trump's move.

In 2017, China accounted for about 41 percent of all apparel, 72 percent of all footwear and 84 percent of all travel goods imported into the United States, the industry said.

"ANOTHER 25 PERCENT?"

"Outdoor products already face one of the highest tariffs out there, and now you are going to add another 25 percent?" the industry complained in a statement, warning Washington's decision could drastically increase the cost of technical outdoor gear, potentially hurting the outdoor recreation economy, whose size is 887 billion dollars according to the OAI.

Currently, the outdoor industry pays steep tariffs applied by the United States, with an average rate of about 17 percent.

"These products are already heavily taxed, and if they are included in the final list of products subject to retaliatory tariffs, this announcement means a typical 200 dollars pair of hiking boots could increase in cost by 80 percent to as much as 360 dollars a pair," OIA's Amy Roberts said.

"I don't think this will hurt these big businesses -- they will just pass the cost onto their customers," said Washington-based policy analyst David Richardson.

Industry retailers disagreed. "This has the potential of being a devastating blow," Alex Boian, the vice president of government affairs for Boulder's Outdoor Industry Association, told U.S. National Public Radio.

The tariff proposal would increase fees by 25 percent paid on goods imported from China. When compounded with wholesaler, distributor and retailer costs, the mark-up can climb as much as 75 percent, said Boian.

As a result, a 100 dollar increase in tariffs on a 400 dollar ski jacket which already has a duty rate of 27.7 percent ends up costing the consumer as much as 300 dollars more after a distributor doubles the price and a shop owner adds their costs, the OIA said.

"It's going to hit the American consumer hard," Boian said.

THINK TWICE

In Aspen, Hamilton shoppers expressed alarm at the possible sticker price hike.

"If these products double in price, I'm thinking twice about buying them," Alex Winnaker told Xinhua.

"(Trump) is threatening good American jobs and making it harder and more expensive for Americans to enjoy healthy and active outdoor lifestyles," said Amy Roberts, executive director of the OIA.

Last week, a consortium of 20 apparel, travel goods, footwear and fashion associations also sent Trump a letter detailing these substantial import tariffs, including 37.5 percent on hiking boots, 27.7 percent on ski jackets and 17.6 percent on backpacks.

"Mr. President, last year you signed into law a sweeping tax cut that will reduce the taxes paid by many Americans and position our country for unparalleled economic growth. We are concerned that many of those gains could be eliminated through the inflationary and job-destroying effects of these new tariffs, undermining your pro-growth agenda that benefits American workers and their families," the letter read.

"He (Trump) is hurting thousands of business owners, ironically, many people who supported him," Aspen fitness instructor Christopher Troy told Xinhua.

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