Will inflation make Trump tariffs go away?
Apparel executives and industry leaders pushing for action on tariffs believe the inflation angle could be particularly compelling for Biden, who regularly touts his middle-class roots and likes to defend American families. The president’s approval rating has plummeted, in part because of rising prices. Tariffs have a direct impact on these prices, as Treasury Secretary Janet Yellen acknowledged in November. For clothing imported from China, the 301 tariff can add 7.5% to 25% to the duty that manufacturers and importers must pay – a cost typically passed on to the consumer.
The Trump administration implemented its Section 301 tariffs in 2019 on a range of products. At the time, the Chinese fought back with their own tariffs, targeting products made in the United States and triggering a trade war. When Biden took office, the US clothing industry expected the tariffs to be waived. The industry is still waiting.
In the meantime, some remedies are possible, both short and long term. A handful of clothing companies and US importers have obtained relief by asking for tariff exclusion. Businesses and importers – which can include farmers, retailers and manufacturers – can request a waiver of Section 301 tariffs on individual items, but not on product lines, provided the goods do not. could only be produced in China and the tariffs would hurt the United States. However, very few US companies have been able to request tariff relief because the program is open to so few.
U.S. Trade Representative Katherine Tai hinted in October that her office could expand that list. “We will launch a targeted tariff exclusion process,” she said. “We will ensure that the existing execution structure optimally serves our economic interests. We will keep open the potential for further exclusion processes, if necessary. “
The last application process was completed on December 1 for some 549 products that could gain approval for a temporary exclusion from section 301 tariffs. These applicants include slow fashion brand Mikumo Apparel; Eastern Silk Mills, which imports silk fabrics; and Pawstar Inc., which buys long-haired synthetic fur from China.
“The first solution is the relief that the administration itself provides, either through the exclusion process. [Section 301] or by going back on the tariffs ”, explains Lamar of the AFOA. “The other relief would be for Congress to pass a law ordering one of these outcomes.”