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June 17, 2019

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Tariff hikes cripple American travel goods industry

Slapping additional tariffs on Chinese goods has a huge impact on American travel goods businesses as China has always been US companies’ first-choice supplier, a business leader has said.

Nate Herman, director of government relations at the US Travel Goods Association, told Xinhua recently that tariffs on Chinese goods have already taken a toll on the US travel goods industry.

“We pay tariffs ranging from 8 percent to 20 percent, depending on the type of travel goods, so with 25 percent punitive tariffs on top ... our members are forced into a situation that they have to either raise prices or basically eliminate their margins, and if they raise the prices, then there’s concern about lowering sales,” which would in turn stifle hiring, said Herman. On May 10, the United States increased tariffs on US$200 billion worth of Chinese goods, which include US imports of travel goods from China, from 10 percent to 25 percent, and has threatened to raise tariffs on some US$300 billion worth of Chinese imports yet to be hit.

Herman, whose association represents about 250 manufacturers and retailers in the country’s travel goods industry, said about 82 percent of all travel goods sold in the United States — luggage, backpacks, handbags, totes, wallets, brief cases, smart phone cases and other travel accessories — are imported from China.

Vietnam, India and Cambodia currently rank number two, three and four respectively, in supplying US travel goods companies and stores, he said.

Calling China “the first-choice supplier,” the senior executive attributed the large amount of US-China collaboration in the industry to the good quality, reasonable price and great innovation of the Chinese products.

Not a realistic option

He pointed out that tariffs are hitting the US travel goods industry, where 90 percent are small and medium-sized businesses.

Shifting supply chains to other countries is not a realistic option, he said, as building supply chains somewhere else is costly and will take time, and more importantly, “nobody has the capacity of China to produce the travel goods.”

As a result, US businesses and consumers will have to absorb the burden.

According to a report from Tariffs Hurt the Heartland, a bipartisan campaign against the levies, increasing duties on Chinese goods to 25 percent would cost a US family of four 767 dollars annually and could lead to a loss of over 934,000 jobs in the country.

Joining numerous business leaders from other industries that have voiced opposition against the US administration’s tariff moves, Herman also called on a resolution to US-China trade issues, thus easing the concerns of people from both sides since last year.

“I hope that eventually both sides will see that a trade war does not serve anyone’s interest and only hurts the people in each country,” he said.


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