Outdoor Retailer - Winter 2020 - 17

went up 15% effective September 1, 2019. As
(the start dates have also been a moving tarthis issue goes to press, tariffs List 4b are still
get and under contention between importplanned to be effective on December 15, 2019,
ers and the Commerce department collecting
adding a 15% tariff on those goods-but anythe fees).
It's not just brands that manufacture in
thing could happen.
China that are affected, either. Many U.S.
It's difficult to wrap one's head around the
manufacturers are feeling the crunch, too.
fact that "fleece jackets," for example, were
Almost all plastic hardware, zippers, sliders,
already facing a 32% tariff, with an additionnylon webbing/tape, and synthetic fabrics
al 15% now in place. And with some hiking
are imported from China. "The tariffs are
boots already facing a 37.5% import tariff, an
definitely increasing our costs of building
additional 15% punitive tariff on top of that is
products in the U.S.,"
a huge blow, according
says Davidson Lewis
to OIA.
of Green Guru Gear
Yet another uncertainin Boulder, Colorado.
ty for brands is that policy
"Pretty much all plastic
is not only constantly
hardware is made in
moving in terms of what's
China these days, along
going to happen when,
with a good percentbut also when it comes to
-RICH HARPER, OUTDOOR INDUSTRY
what items are going to
age of fabrics. These
ASSOCIATION
be on the lists. For examraw materials increases
have gone up 23% since
ple ski and snowboard
October, so all of a sudden we have to take
helmets were initially going to be on List 4,
that into account. The good thing is Green
then were to be exempt as safety items on List
Guru's business is built on utilizing upcycled
3, and then ended up back on List 4.
and salvaged materials found in the U.S.,
As reported by OIA in September 2019,
keeping our need for imported materials
outdoor brands paid $1.8 billion more in
some of the lowest in the industry."
tariffs from September 2018 to July 2019
than the same period a year ago. And OIA
says that since the start of the trade war with
SO WHAT CAN MANUFACTURERS DO? THE
China in the spring of 2018, outdoor equipnumber-one mitigation strategy being emment makers have paid a total of $2.8 bilployed by brands is to shift production away
from China-but that can take years. In an
lion in tariffs. This includes products such
attempt to limit exposure, brands are sacrificas camp chairs, bikes, kayaks, ski gloves,
and backpacks, all laid out in very detailed,
ing decades of relationships with factories in
specific "harmonization" codes (HTS codes,
China and moving as quickly as possible to
which dictate the rate of duty on a product)
other countries-even though some alternafor products with varying start dates, which
tives, such as Vietnamese footwear factories,
are subject to tariff increases based on counare already at capacity. Brands with a diversitry of origin (China) and when they shipped
fied supply chain are able to spread tariff risk

"THE CONCERN IS
THESE PUNITIVE
TARIFFS BECOME
THE NEW NORMAL."

DAMAGE TOLL

Outdoor companies have paid an extra $1.8 billion in tariffs over an 11-month period (Sept. 2018-July 2019) compared to the same period a year before. In total,
outdoor companies have seen the amount of tariffs paid triple since the U.S.-China
trade war began last year. A 15% punitive tariff on outdoor apparel, footwear and
equipment came into effect on September 1, and another 15 percent tariff will be
applied to a second group of these products on December 15.

more nimbly than others, and that means less
chance of cost increases being passed on to
retailers and consumers. But most brands say
bringing production back to the U.S. simply
isn't a reality.
The other big takeaway right now is that,
"There's really no end in sight," says Rich
Harper, OIA's manager of international
trade. Halting the increease to 30% on List
3 in October seemed like a positive development-but uncertainty still rules. "We've been
close to a deal before. I'm advising members
this could go on for a while."

A BRIEF TIMELINE OF THE
CHINA TARIFFS
For many outdoor companies, September
18, 2019 marked the one-year anniversary of the imposition of punitive tariffs on
their products sourced from China. And
there was more to follow:
SEPTEMBER 2018
Outdoor companies begin paying an extra
10% tariff on backpacks, camp chairs, some
camp stoves, bikes, leather ski gloves, hats
and other products (List 3).
MAY 2019
Punitive tariff on List 3 rises to 25%.
SEPTEMBER 2019
Outdoor companies began paying a 15%
tariff on apparel, footwear, and some sporting goods (List 4a).
OCTOBER 12, 2019
President Trump announced that the planned
tariff increse on List 3 from 25 to 30% slated
for October 15 would be halted.
DECEMBER 15, 2019
As of press a 15% tariff will be levied on
another group of outdoor apparel, footwear
and sporting goods is planned to come into
effect (List 4b).

-Courtesy Outdoor Industry Association

Winter 2020 / OUTDOOR RETAILER 17

Outdoor Retailer - Winter 2020

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