A truce in the US-China trade war

July 2, 2019

New Round of China Tariffs on Hold

In welcome news for outdoor manufacturers, retailers and suppliers, at the G20 Summit in Japan on Saturday, President Trump and President Xi of China declared a truce in the US-China trade war and put on hold the imposition of any new tariffs. 

The president had called for a punitive tariff of up to 25 percent on $300 billion worth of products, including all outdoor apparel, footwear, tents, sleeping bags, skis, snowboards and other sporting goods. 

“We welcome news that there is a pause in the escalating trade war with China and no new tariffs will be imposed on outdoor companies and their products for an indefinite period. Now is the time for President Trump and Chinese President Xi to quickly finalize a trade deal, remove all punitive tariffs and free American businesses and consumers from the economic burden of billions of dollars in increased costs this trade war has already caused,” said Patricia Rojas-Ungar, vice president of government affairs for Outdoor Industry Association. “Until a deal is concluded American businesses face increased uncertainty at a time when they should be innovating new products and potentially adding new employees – let’s get it done.”

Negotiations between the US and China will resume with the goal of a final agreement that will protect US intellectual property and remove all existing punitive tariffs on $250 billion worth of products, including a number of outdoor products on the so-called List 3. No deadline has been set for those discussions at this time.

OIA Member Mobilization

The announcement comes a week after OIA and 15 outdoor companies testified before high-level Trump administration officials in Washington, D.C. in opposition to the proposed next round of tariffs, highlighting the devastating impact they would have on jobs, innovation, business opportunities and getting more Americans outdoors. Additional companies filed written comments during the public comment period and joined a letter organized by the Americans for Free Trade coalition that had a total of 661 signatories in opposition to the next 25 percent round of tariffs.

List 3 Exclusion Process

USTR has also launched a formal process for companies to file petitions to excludeproducts on List 3 from additional tariffs. Products on this list –including backpacks, sports bags, bikes, camp chairs, leather ski gloves, camp stoves and headwear – were hit with a 10 percent punitive tariff last September that rose to 25 percent on May 10

You can learn more about the information needed to file a petition at exclusions.USTR.gov and view a draft form here. The deadline for filing petitions is September 30, 2019. Please contact me to learn more about this process and how your company can get involved. 

New Economic Research

OIA commissioned new research to determine just how much our industry is paying in extra tariffs on Chinese imports. What we found is alarming. From last September when the 10 percent tariff went into effect on List 3 products through April 2019, outdoor companies paid an extra $1.1 billion in tariffs compared to a year earlier. The tariff on those products increased to 25 percent as of May 10, so costs for outdoor companies have grown even more since April.

Even worse, our research shows that if President Trump moves forward with imposing a 25 percent tariff on all remaining outdoor goods from China, the outdoor industry could pay $1.5 billion per month in additional tariffs. 

What’s next?

The president may still move forward with additional tariffs on outdoor products if talks with China are not successful. We will continue to engage Congress and the administration, organize lobby visits and sign-on letters, engage the media and keep OIA members fully informed through webinars, trade alerts and other updates on developments in the US-China trade war. You can help by:

  • Sharing your story with OIA and the media: please contact me at rharper@outdoorindustry.org
  • Inviting your representatives to your facility during the August recess 
  • Joining us in Washington, D.C. for a day on Capitol Hill

Please contact me with any questions and to learn more about how you can get involved.