Where’s the Beef?
By Nate Herman
I am writing at the end of a momentous week here in Washington, DC. President Trump signed the U.S./China Phase 1 trade deal in a big White House ceremony. And Congress overwhelmingly approved the U.S.-Mexico-Canada Agreement (USMCA), the successor to the North American Trade Agreement (NAFTA).
As I witness these historic events, I keep thinking to myself, “Where’s the beef?”
In addition to showing my age, the phrase succinctly captures the reality for the U.S. travel goods industry. To put it another way, as we approach an important holiday for some, the industry looks at these “landmark” agreements and asks, “Why is this week different than any other week?”
The answer, regrettably, is that it isn’t any different. When these agreements are implemented, absolutely nothing will change for the industry.
Our industry continues to pay 25% punitive tariffs on our imports from China, which supplies over 2/3 of all travel goods sold in the United States. Our industry still faces skyrocketing prices and crowding out by our 2nd largest supplier, Vietnam, as electronics, toys, furniture, clothes, and shoes rush in and steal our capacity. And the U.S. government is still aggressively reviewing (and pulling in some cases) the duty-free access of our third choice – developing countries benefitting under the Generalized System of Preferences (GSP) program. And the travel goods rules under USMCA…they are the same as NAFTA.
What was I doing this week? Testifying in opposition to the U.S. government’s proposal to impose up to 100% punitive tariffs on our imports from Europe over…wait for it…European subsidies for Airbus and France’s digital services tax.
And there is little relief in sight. Out of the hundreds of petitions for relief from the China tariffs reviewed by the U.S. government so far, they have granted relief for only one…yes…one petition on a travel goods item.
In short, there is no beef.
Yet, all hope is not lost. There remain options…and opportunities for the industry.
First, the U.S. government still has hundreds of travel goods petitions to review on the China tariffs.
Second, the GSP program still provides tremendous opportunities for the industry to look at importing travel goods duty-free from Cambodia, Burma (Myanmar), the Philippines, Pakistan, Sri Lanka, and many other countries. And there are positive signs that the ongoing U.S. government reviews of GSP benefits for Thailand and Indonesia won’t impact duty-free benefits for U.S. imports of travel goods from those countries.
Third, the Miscellaneous Tariff Bill (MTB) process, which could temporarily reduce or eliminate tariffs on imports of certain products, continues to move forward. The MTB package, with dozens of travel goods products under consideration, is on pace to be approved by Congress by the end of this year.
Finally, just like Wendy’s offering the elusive beef in the commercials of yesteryear, TGA offers its members advice on other ways to mitigate the costs of the trade war.
For more information, please contact TGA’s Nate Herman at email@example.com or 202-853-9351.