It’s hard to believe it’s been four years since a series of tariffs were imposed on China by the Trump Administration. This so-called trade war was started primarily to address the trade imbalance between the U.S. and China. There were several tariffs imposed over the summer of 2018 in four stages. Many of them included home furnishing products that HFA members carry.
As the tariffs come up for mandatory four-year review by the United States Trade Representative, this is a chance to judge their effectiveness and, most notably, the impact on U.S. consumers.
Numerous reports show the impact of the tariffs has been negative on both U.S. imports and exports. In fact, according to the National Bureau of Economic Research, “The trade war has not yielded any tangible benefits for U.S. firms and workers. While the U.S. tariffs were intended to protect American industries, they have largely hurt the U.S. economy.” The primary reason is that the tariffs set off retaliatory responses from China and other countries. Many U.S. products, particularly agriculture, have lost market share due to the retaliatory tariffs.
One of the simplest ways to see the impacts on U.S. goods is to look at shipping containers. While we still have ports overloaded with inbound containers, most are going back empty once they are unloaded. The trade imbalance is alive and well even with tariffs.
Most furniture imported from the Far East does not come from China. We know there has been a considerable migration of manufacturing to Vietnam and Malaysia. However, for specific categories, China is still a significant player. Our members report the tariffs on leather motion and outdoor furniture categories imported from China are significant. In many cases, vendors and retailers are sharing the cost while passing some on to consumers. With inflationary pressures across the supply chain, these costs are only increasing for all.
With inflation weighing heavily on the economy, industries, and consumers, relief of any kind would be welcome. If tariffs are not accomplishing the goal of narrowing the U.S. trade deficit and hurting our economy, then it seems like a no-brainer. It’s time for the USTR to lift or roll back many of the tariffs. It would help U.S. industries, and most importantly, it would positively impact consumers who need some relief right now.
To learn more about what HFA is doing to influence legislation that impacts retailers, click here.