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Powerful, obscure law is basis for Trump 'order' on trade

FILE PHOTO: In this June 29, 2019, file photo, President Donald Trump, left, meets with Chinese President Xi Jinping during a meeting on the sidelines of the G-20 summit in Osaka, Japan. China has announced it will raise tariffs on $75 billion of U.S. products in retaliation for President Donald Trump's planned Sept. 1 duty increase in a war over trade and technology policy. (AP Photo/Susan Walsh, File)

More than 200 U.S. footwear companies on Wednesday urged President Donald Trump to cancel proposed higher tariffs on Chinese imports that take effect beginning next month, calling them hidden taxes that will raise consumer prices. Local companies that signed the letter include Rawlings Sporting Goods, Elan Polo and Caleres, which operates the Famous Footwear chain.

“Imposing tariffs in September on the majority of all footwear products from China — including nearly every type of leather shoe — will make it impossible for hardworking American individuals and families to escape the harm that comes from these tax increases,” the companies wrote in a letter to Trump.

While tariffs on some Chinese imports will be delayed until Dec. 15, the majority of footwear lines face an added 15% tariff on Sept. 1, the letter said. That comes on top of tariffs that already average 11% and reach 67% on some shoes, it added.

“This added 15% tax will cost U.S. footwear consumers an additional $4 billion every year,” the letter said, citing an estimate by the Footwear Distributors & Retailers of America trade group, which spearheaded the letter.

The letter, signed by companies including Adidas and Foot Locker, warned that the new tariffs would exacerbate economic uncertainty and could drive up prices in other countries that produce footwear, given limited production capacities.

The U.S. Trade Representative’s Office on Wednesday reaffirmed Trump’s plans to impose an additional 5% tariff on a $300 billion list of Chinese imports starting Sept. 1 and Dec. 15. The Trump administration had previously planned to impose a 10% tariff on these imports.

Matt Priest, the footwear trade group’s chief executive, warned that the higher tariffs would result in job losses across the industry.

“Brands have already said tariffs will dent job growth and shoe stores are saying it’s a job killer,” Priest said in a statement. “We hope the president listens to Americans across the country ... and stops this unnecessary trade war.”

The letter also rejected comments from U.S. officials who say China can simply devalue its currency to cover the added costs.

“This is simply not true when it comes to our industry, because import prices are almost always quoted and negotiated in U.S. dollars not RMB (Chinese yuan),” it said. “For RMB devaluation alone to offset the 15 percent tariff increase for some shoes, the currency would have to drop by more than 40 percent.”

The Post-Dispatch contributed to this story.

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