Testimony of Richard W. Harper, Jr., Manager of International Trade, Outdoor Industry Association on $300 billion Annex to Section 301
On behalf of Outdoor Industry Association (OIA), I am pleased to be here to provide testimony on the impact of the proposed tariffs of up to 25 percent on outdoor companies and their specific products.
OIA is the trade association for more than 1,400 companies across the United States, including suppliers, manufacturers and retailers of outdoor products. The outdoor recreation economy generates more than $887 billion in consumer spending and accounts for 7.6 million American jobs in the United States. Our members produce some of the most innovative products that reach all corners of the globe, enriching people’s lives by supporting healthy and active lifestyles.
Many outdoor companies have already been harmed by punitive tariffs – first 10 percent, then 25 percent – on List 3 products including backpacks, sports bags, kayaks, bikes, camp chairs, camp stoves, leather ski gloves and headwear. Our industry is working mightily to move production out of China and have been successful in certain areas such as backpacks due to the extension of GSP to those products. However, given the technical nature of our products, and the need often to certify factories, moving production can easily take three years or more.
List 4 tariffs would hit a broader range of outdoor goods, including all outdoor apparel, footwear, tents, down sleeping bags, skis, snowboards, as well as components for non-down sleeping bags made in the United States dealing a massive blow to the outdoor recreation economy.
Despite the fact that there is no commercially significant domestic production of many of the outdoor products listed in the Federal Register notice, they already face significant import tariffs, as high as 32 percent for polar fleece jackets and 37.5 percent for hiking boots.
An additional tariff of up to 25 percent on top of what some members are paying on List 3 products, will raise costs for outdoor companies, cut already thin profit margins, hamper innovation and new product development and depress U.S. job growth.
It could very well force some small and medium-sized businesses to shut their doors, resulting in significant job losses. And it will put many of these products out of the reach of U.S. consumers.
We are also surprised and disappointed to note that some products removed from previous lists following public comments and a hearing, such as bicycle and snow helmets, have re-appeared on List 4. The administration has already thoroughly vetted these products and have determined that they should be excluded from any additional tariffs. Yet, we must now make the same case we did less than year ago as to why these products should not face punitive tariffs as a part of the China 301 investigation. Having to re-visit this debate creates even more uncertainty for outdoor companies as they make critical decisions relating to sourcing options, margins, retail prices and new job hires.
While outdoor companies are, as I mentioned, actively looking to diversify their sourcing options, in several cases, China continues to dominate the market, with the infrastructure and skilled workforce outdoor products require. Other countries that are viable sourcing options may already be at capacity