OIA Quantifies Trade War Impact

Outdoor Industry Association (OIA) yesterday released the first comprehensive look at the impact of new tariffs on America’s outdoor industry at a tariff town hall event in Denver, Colorado, co-hosted by Tariffs Hurt the Heartland. The data shows that outdoor companies and consumers paid an extra $1.1 billion due to new tariffs in the period from September 2018, when tariffs went into effect, and April 2019, when the most recent government data is available. The tariffs have been placed on outdoor equipment – including backpacks, camp stoves, camp chairs, hats and bikes. The data also found that increases on existing tariffs and additional threatened tariffs will cost the outdoor industry an additional $1.5 billion every month, said OIA.

“Tariffs on products vital to America’s outdoor recreation economy, which supports 7.6 million American jobs, are sapping the strength of one of our nation’s most important industries,” said Patricia Rojas-Ungar, vice president of government affairs for the Outdoor Industry Association. “These are significant taxes on an industry that fuels economic growth and healthy communities across America. To date, these tariffs have caused so much unpredictability for outdoor companies that many have had to slow or cancel job-creating investments and have resulted in higher costs for businesses in every corner of the country. As bad as over $1 billion in new taxes has been, the worst is on the way in the form of a recent increase of the tariffs to 25 percent and threatened tariffs on over $60 billion more in outdoor goods.”

The tariffs captured in the data include 10 percent tariffs on outdoor products that are included in the $200 billion, the List 3 group of products that have been imposed as a result of the China Section 301 tariff action. The data shows that from September 2018 through April 2019, outdoor companies paid an extra $1.1 billion in tariffs on List 3 products compared to the tariffs on the same products a year earlier. The tariffs rose from more than $650 million to more than $1.7 billion in a year. On May 10, the tariffs on List 3 products increased from 10 percent to 25 percent, which will more than double the tariff burden for the outdoor industry in the months to come, said OIA.

In addition to the List 3 tariffs already in place, the administration has also threatened, but not yet imposed, tariffs on an additional $300 billion or “List 4” products at a rate of 25 percent. From September to April 2018, imports of outdoor products on List 4 totaled $61 billion compared to about $14 billion in imports of products on List 3 products. In total, the data found that 25 percent across-the-board tariffs on both List 3 and List 4 could result in $1.5 billion in extra tariffs per month on outdoor products from China in the coming months.

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The data was released today at a tariff town hall event co-hosted by Outdoor Industry Association, the voice of the outdoor recreation industry, and Tariffs Hurt the Heartland, the national campaign against tariffs supported by more than 150 trade associations representing retail, tech, manufacturing and agriculture. The town hall took place at the Outdoor Retailer Summer Market in Denver and included a discussion of the impact of tariffs on businesses and the outdoor recreation economy as a whole. Participants in the town hall, in addition to OIA and Tariffs Hurt the Heartland, included Peter Bragdon, executive vice president, CAO and GC, Columbia Sportswear; Kay Martin, CEO Boco Gear in Denver; Sara Bowersox, global manager, compliance, Keen Footwear; and Matthew Anderson, president and COO, Charter Brokerage.

“All of our trading partners need to adhere to global trade rules and respect intellectual property,” said Peter Bragdon, executive vice president, chief administrative officer and general counsel, Columbia Sportswear Company. “But slapping more tariffs on this industry simply makes for more uncertainty, which is the enemy of investment. The only thing we know for sure about a trade war is that American consumers pay the price.”

“Raising tariffs to 25 percent is severely hurting our business. Boco Gear primarily sells hats and other headwear, so we do not have a ton of options to spread major cost increases across a variety of product lines. This means we may be forced to pass these tariffs on to customers, which in the long run hurts our business and our customers — making this a lose-lose situation. There has to be a better way to negotiate trade issues rather than increasing tariffs, which only serves to squeeze dollars from Americans.” Added Kay Martin, CEO, Boco Gear

Representatives from the Outdoor Industry Association will also be on hand this week for hearings that the U.S. Trade Representative (USTR) is doing on the impacts of the threatened List 4 tariffs. Company representatives and OIA staff will testify over seven days of public hearings:

· June 17: VF Corporation, Wolverine Worldwide, New Balance Athletics

· June 18: Outdoor Industry Association, Camp Chef, Big Rock Sports

· June 19: Krimson Klover, NEMO Equipment, Intex Recreation Corporation, Exxel Outdoors, Snowsports Industries America, Bushnell

· June 20: Bell Sports, Inc., Quality Bicycle Products, CamelBak Products, People for Bikes

· June 24: Columbia Sportswear

· June 25: Burton Corporation, Sports and Fitness Industry Association

The data comes from the monthly Tariff Tracker that Tariffs Hurt the Heartland publishes in conjunction with The Trade Partnership. Monthly import data is calculated using data from the U.S. Census Bureau. Outdoor Industry Association data reflect imports of approximately 350 8-digit tariff lines for outdoor equipment, textiles, apparel and footwear. These codes have been identified by industry stakeholders over the course of years – not in response to the China Section 301 tariffs – and every tariff code is included on at least one of the China Section 301 lists.

One Response

  1. Joe Outdoor
    Joe Outdoor at |

    What about the cost of all our designs being taken and knockoffs flooding the market. What’s the cost of that? I’d rather manufacture my gear here in the US so I don’t have to deal with the theft of our intellectual property! Why aren’t you talking about that?

    Reply

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