Leading Retailers Warn About Tariffs Impact on Consumers

Over the last two weeks, the U.S. Trade Representative (USTR) held public hearings on the Administration’s proposed Section 301 tariffs. Hundreds of representatives from every sector of the American economy voiced concerns about the potential impact of tariffs to their businesses, workers, and the U.S. economy. The retail industry in particular has been outspoken about the fact that tariffs are taxes Americans pay; several RILA member companies testified to that effect, urging the Administration to back down from this latest tariff threat.

Below are a few highlights from retailers’ written comments submitted to USTR, all expressing concern over how these tariffs would impact US consumers, workers, businesses, and the overall economy.

Apple

U.S. tariffs would weigh on Apple’s global competitiveness. The Chinese producers we compete with in global markets do not have a significant presence in the U.S. market, and so would not be impacted by U.S. tariffs. Neither would our other major non-U.S. competitors. A U.S. tariff would, therefore, tilt the playing field in favor of our global competitors.

Best Buy

Clearly, there needs to be a fair play and a level playing field in the U.S. trade and investment relationship with China, but this need not come about at the expense of U.S. consumers, workers, and businesses.

Designer Brands

Such a substantial tariff increase would almost certainly result in higher consumer prices, declining sales and job loss in Designer Brands’ U.S. retail locations and corporate offices.

Dollar Tree

If tariffs are imposed, the impact on our customers, many of whom are middle-and low-income and rely on our stores for their daily necessities, will be severe.

Gap

Since 2014, Gap Inc. has invested more than $400 million in U.S. inventory and fulfillment infrastructure and created 3,000+ U.S. jobs in light manufacturing. We urge the Administration to continue to avoid tariffs on consumer products, particularly apparel, which would undermine these investments and put at risk the country’s current economic growth by reducing consumer spending.

IKEA

We see the United States as a market where we can continue to grow and invest, and hope to do so for many years to come. But we have concerns that steep increases in tariffs on all goods from China will have a long-term negative impact on our ability to provide affordable products to the American people and could have the unintended consequence of slowing investment in the United States.

JCPenney

Make no mistake about it: Tariffs are taxes, and the Administration has proposed a massive tax increase on apparel, footwear, and household items that Americans consume every day.

Jo-Ann Stores

Most of the items sold by JOANN are used to create clothing, blankets and other items which are made by American individuals, charities and small businesses. Tariffs on these component parts will unintentionally amount to a "Made in America tax” on sewing and crafting projects that are completed in the United States and actually incentivize the purchase of foreign-made items. This result is entirely inconsistent with the Administration's well-founded objective that its trade policy should support economic growth.

Macy’s

There can be little doubt that imposing tariffs on apparel and footwear would cause economic harm to U.S. consumers. Indeed, List 4 includes a proposed tariff on all types of baby garments - a new tax on baby clothes. It is hard enough for new parents to make ends meet while changing diapers and surviving on a few hours of sleep. Is it really a good idea to impose new taxes on baby clothes?

Meijer

The financial impact of such price increases on the American consumer would be substantial, if not devastating, in conflict with the stated aim of the tariffs to affect minimal impact on American interests.

PetSmart

The listed products are considered essential products by our millions of American consumers. Adding tariffs to these products will likely result in increased prices to U.S. consumers, and will not provide any significant leverage to the U.S. government as it continues to engage with the Chinese Government on longstanding concerns.

Target

We remain concerned by and strongly oppose any consideration to add tariffs on imported consumer goods, given their impact on prices, and ultimately, American families. The current proposal to impose up to a 25 percent tariff on an additional $300 billion in Chinese imports will further hurt American consumers, especially budget-conscious parents who are concerned about their children’s safety, mental and physical development and comfort in everyday life.

Tractor Supply Company

Imposing additional duties on these particular codes will punish hardworking American farmers, ranchers and their families in rural areas and harm the American economy, while doing nothing to combat China’s unfair trade practices.

VF Corporation

Supply chains are highly complex and incredibly important to supporting jobs in the U.S. Imposing tariffs to punish the originating country also damages U.S. supply chains and puts these American jobs at risk. While we recognize the issues with China’s IP and forced technology transfer practices, we ask ourselves if the cost of tariffs to U.S. companies and consumers cause more harm than the problem they are trying to solve.

Walmart

The proposed tariffs will disproportionately impact U.S. consumers, given that many everyday items such as apparel, footwear, consumer electronics, toys, and household appliances make up the majority of the products on the list. Tariffs on these daily items are likely to hit low-income American families the hardest.

In addition to the above RILA member companies’ testimonies, RILA’s Vice President of International Trade Hun Quach also testified before the USTR hearing last week, writing:

American families should not bear the burden of another round of tariffs imposed on billions of dollars’ worth of consumer goods while the Administration is working to address China’s bad trade practices.

RILA’s full comments can be found here.

For more information on the retail industry’s efforts to combat tariffs or RILA’s ongoing trade policy advocacy efforts, please contact Vice President of International Trade Hun Quach.