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US Companies Say Price Hike Inevitable at China Tariff Hearing

Currently there's no country manufacturing metal baby gates outside of China

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FILE - A shopper is seen in the aisle of a Walmart store in Woodstock, Georgia, June 28, 2018. VOA

A broad range of U.S. companies told a hearing in Washington on Monday that they have few alternatives other than China for producing clothing, electronics, and other consumer goods as the Trump administration prepares 25% tariffs on remaining U.S.-China trade.

The comments came on the first of seven days of hearings that began on Monday, held by the U.S. Trade Representative’s Office (USTR), on President Donald Trump’s plan to hit another $300 billion worth of Chinese imports with tariffs.

Sourcing from other countries will raise costs, in many cases more than the 25% tariffs, some witnesses told a panel of U.S. trade officials from USTR, the Commerce Department and other federal agencies.

Mark Flannery, president of Regalo International LLC, a Minnesota-based maker of baby gates, child booster seats and portable play yards, said that pricing quotes for shifting production to Vietnam – using largely Chinese-made steel – were 50% higher than current China costs, while quotes from Mexico were above that.

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The comments came on the first of seven days of hearings that began on Monday, held by the U.S. Trade Representative’s Office (USTR). Pixabay

“Currently there’s no country manufacturing metal baby gates outside of China,” Flannery said.

Child safety products such as car seats were spared from Trump’s previous tariffs on $200 billion worth of Chinese goods, imposed in September 2018. But in the drive to pressure China in trade negotiations, USTR put them back on the list, along with other products spared previously, from flat-panel televisions to Bluetooth headphones.

The proposed list, which will be ready for a decision by Trump as early as July 2, includes nearly all consumer products, and could hit Christmas sales hard, particularly cell phones, computers, toys and electronic gadgets.

Marc Schneider, chief executive of fashion footwear and apparel marketer Kenneth Cole Productions, said 25 percent tariffs would wipe out the company’s profits and cost jobs. With China producing 70 percent of the shoes bought in the United States, there were no alternatives, including India and Vietnam, that could match China’s quality, price and volume, he said.

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“We’re going to lower the quality of footwear, raise prices and accomplish nothing by moving it around to other countries,” Schneider said.

In a letter addressed to the USTR ahead of Monday’s hearing, clothing retailer Ralph Lauren Corp asked for apparel and footwear to be removed from the tariff list, arguing that a rise in duties would lower sales and lead to U.S. workers losing their jobs.

Jean Kolloff, owner of cashmere importer Quinn Apparel, said her reason for opposing the tariffs was geographical – the Alashan goat that produces light-colored cashmere wool is only found in China’s Inner Mongolia region.

“We searched for similar species of goat in an attempt to copy the hair from this animal in other countries or even domestically, but to no avail,” she said.

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Sourcing from other countries will raise costs. Pixabay

Deteriorating relations

The tariff hearings are underway amid a severe deterioration of U.S.-China relations since Trump accused Beijing in early May of reneging on commitments that had brought the world’s top two economies close to a deal to end their nearly year-long trade
war.

Since then, Trump raised tariffs to 25% on $200 billion of Chinese goods. The $300 billion list of products being reviewed in the hearing would bring punitive tariffs to nearly all remaining Chinese exports to the United States.

Trump has said he wants to meet with Chinese President Xi Jinping during the June 28-29 G20 leaders summit in Japan, but neither government has confirmed a meeting.

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The list of more than 300 scheduled witnesses includes representatives from retailer Best Buy, toy maker Hasbro Inc, vacuum cleaner maker iRobot, faucet maker Moen, and other firms and trade groups in a diverse range of industries.

Not all of the witnesses on the first day of the hearing were opposed to the tariffs. Mike Branson, president of Rheem Manufacturing Co’s air conditioning division, asked Trump administration officials to close a loophole that was allowing Chinese firms to skirt air conditioner tariffs by shipping condenser and air handler units separately.

This allowed the units to be imported duty free as parts, rather than as completed units that were subject to tariffs.

Domestic manufacturers had ample capacity to make these products, Branson said. (VOA)

Next Story

Why U.S. Women’s Soccer Dominates on World Stage while Men’s Game Continues to Falter

The U.S. men haven’t come close to the women’s success

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Mexico's Rodolfo Pizarro, right, controls the ball against U.S. forward Paul Arriola during the Gold Cup final in Chicago, July 7, 2019. Mexico won 1-0. VOA

In the 28 years since winning the very first Women’s World Cup, the U.S. women’s soccer team has dominated the game on the global stage, taking home four Women’s World Cups in all, including the 2019 title captured this month in a 2-0 victory over The Netherlands.

The U.S. men haven’t come close to the women’s success. Not only have the men never won a World Cup, they even failed to qualify for the most recent men’s World Cup in 2018.

To deduce why U.S. women’s soccer dominates on the world stage while the men’s game continues to falter, you might just have to go back to the beginning, to the time when future world-class players — female and male — first start showing athletic promise.

“Soccer was never really been part of the national lexicon. It’s always been kind of this underground, kind of foreign game,” says Eileen Narcotta-Welp, an assistant professor of sport management at the University of Wisconsin-La Crosse. “Not only has it been a foreign game, but it’s been seen as a less masculine state. So if a child has to choose, or their parents have to choose, which sport a child is going to go into, ultimately it’s going to be basketball, baseball, [or] football.”

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U.S. player Megan Rapinoe celebrates after scoring the opening goal during the World Cup final match against The Netherlands outside Lyon, France, July 7, 2019. VOA

The world in general views soccer — or “football” as it is called practically everywhere in the world except the United States — as an extremely male-oriented, overtly masculine game. However, in the United States, more traditional U.S. sports like baseball, basketball, and American football are more likely to be viewed as “macho” activities.

So while little American boys were pursuing other sports, a combination of events laid the foundation for the popularity of girls’ soccer in the U.S.

One of them was the 1972 passage of the federal law known as Title IX, which prohibits federally funded educational institutions from discriminating on the basis of sex. The law applies to high school and college athletics.

Many schools quickly embraced soccer for women because they could field up to 35 players per team, a sizable number that helped close the gender gap in their athletic programs.

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Additionally, the success of the U.S. women’s soccer team has captured the imagination of young female athletes-in-the-making. Over time, they’ve watched and admired soccer icons of yester-year, like Brandi Chastain, and current superstars like Meghan Rapinoe, and are inspired to emulate them and their success.

Aside from cultural and societal expectations, there are practical financial considerations that help explain why America’s best female athletes might choose to pursue soccer while top male athletes look to basketball, baseball or football.

“Those are also three sports that you can make a living off of,” Narcotta-Welp points out. “If you are a kid that is extremely talented, extremely athletic, and you are a boy…you know that professionally, if you want to play professional sports and succeed, that they’re pretty much three areas in which you’re gonna be able to succeed.”

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In the 28 years since winning the very first Women’s World Cup, the U.S. women’s soccer team has dominated the game on the global stage, taking home four Women’s World Cups. Pixabay

The most talented female athletes have even less choice. Their opportunities to play professionally and make a living out of it basically come down to soccer or basketball.

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“They’re not getting huge exorbitant salaries, but it is kind of the one pathway for young women to play professionally,” Narcotta-Welp says. “For men, you have so many other options that are much more lucrative and probably more culturally acceptable in terms of the idea of masculinity that it would make sense for them to be steered in one of those three directions versus soccer.” (VOA)