USA: What will Trump’s TPP rejection mean for retail?
Written by George Anderson
Those who voted for Donald Trump in the recent election hoping he would prove to be more of a free trade proponent than he indicated at campaign rallies have to be disappointed with his announcement that scrapping the Trans-Pacific Partnership (TPP) was one of the actions he planned to take in his first day in office.
In a video to announce his plans, Mr. Trump called the TPP “a potential disaster for our country.” In its place, he said, “We will negotiate fair bilateral trade deals that bring jobs and industry back onto American shores.”
Mr. Trump’s rejection of the TPP flies in the face of support for the deal from the retail industry.
“Retailers strongly support the elimination of trade barriers and tariffs that will come with passage of TPP,” said Hun Quach, RILA vice president for international trade, in a statement earlier this year. “Retailers embrace the opportunity to compete in new markets and provide better value to our customers.”
According to the Chicago Tribune, retailers sent a letter to each member of Congress urging them to support the trade pact, which to their thinking represented “once-in-a-generation opportunity to reduce costs and open new markets for U.S. brands and retailers.”
Merchants have argued that a reduction in tariffs would show up in increased savings for American consumers. Tariffs on apparel can go as high as 32 percent with footwear as high as 67.5 percent, according to the National Retail Federation (NRF).
The U.S. imports about 98 percent of its footwear. Experts think it’s unlikely that manufacturing jobs for the industry will be repatriated, TPP or not. Manufacturing shoes tends to be labor intensive and foreign workers are paid substantially less than their American counterparts.
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