US-China Sign Phase One Trade Deal
Tariffs rolled back on some outdoor products
The United States and China signed the phase one trade deal today that will, for the first time, roll back some of the punitive tariffs on outdoor apparel, footwear and equipment. Our advocacy and active engagement are making an impact.
The 15 percent tariff on List 4A products will be reduced to 7.5 percent on Feb. 15, 2020. This change will ultimately reduce the total tariffs the outdoor industry is paying on List4a products by about one quarter. The agreement also confirms that the List 4B tariff of 15 percent that was set to hit another group of outdoor apparel, footwear and equipment remains suspended indefinitely as President Trump announced last December. Unfortunately, the 25 percent punitive tariff on $250 billion worth of products – including List 3 items such as backpacks, sports bags, camp chairs, bikes and leather ski gloves – will remain in place.
While the rollback of the List 4A tariffs and the cancellation of the List 4B tariffs are welcome news for outdoor businesses, we know that more is needed to give America’s outdoor businesses a stable economic environment. The fact remains that outdoor businesses have been paying millions in punitive tariffs for many months. From January to November of 2019, outdoor companies paid $7.7 billion in tariffs on affected products, compared to $5.2 billion during the same time period in 2018 and $4.6 billion in 2017. In November alone, outdoor companies paid $800 million in tariffs, with an estimated $480 million directly from China 301 tariffs.
The uncertainty is significantly impacting the ability of outdoor companies to explore new business opportunities, develop new products and create U.S. jobs. Therefore, we are continuing to call on the administration to lift all punitive tariffs now so outdoor companies can stop paying billions in new taxes and get back to doing what they do best: developing new innovative outdoor gear to enhance the outdoor experience.
Since the trade war began, OIA has made the elimination of punitive tariffs and the prevention of new tariffs its top trade priority through the following efforts:
- OIA members and I testified in opposition to the List 3 and List 4 tariffs during the public comment periods, and OIA staff organized lobby days with congressional members and staff and administration officials.
- OIA joined Americans for Free Trade, a coalition of more than 150 companies and associations, and signed numerous letters in opposition to the U.S.-China trade war.
- OIA brought a group of outdoor executives to Washington, D.C., on Sept. 12 for a special event with over 50 congressional and administration staffers on Capitol Hill to discuss the toll these tariffs are having on outdoor companies and the intricate global value chains that bring their products to market. Earl Blumenauer (D-OR-03) delivered opening remarks in support of our efforts on behalf of the outdoor recreation economy.
- OIA has compiled and distributed monthly data highlighting the number of punitive tariffs paid on outdoor products since the U.S.-China trade war began.
- We organized webinars on the List 3 and 4A exclusion processes and intelligent supply chain management, along with panel discussions at OR Summer Market, OR Winter Market and the Grassroots Outdoor Alliance Connect Show.
- In collaboration with our members, we amplified the impact that these punitive tariffs are having on the outdoor industry in order to press for removal of the tariffs through aggressive media outreach.
OIA will continue to work on behalf of the outdoor industry to ensure that all Section 301 tariffs are lifted in the next phase of negotiations with China.