Could you handle a hike in costs on your hiking boots or socks of 50%? That possibility strikes fear into the hearts of the manufacturers of outdoor products, and they’re calling on Congress to assert its authority on trade policy and for the Trump administration to put an end to what they call punitive and destructive tariffs on outdoor products in the trade war with China.
Four of the nation’s top outdoor products companies -- along with representatives of the Outdoor Industry Association, based in Boulder -- talked to reporters Thursday about meetings on Capitol Hill taking place throughout the day and their calls for an end to the trade dispute.
Those meetings have included visits to members of Congress, including with U.S. Sen. Michael Bennet of Colorado.
An increase in tariffs on outdoor products -- from 25% to 30% -- is expected to go into effect in October, outdoor company reps said Thursday.
President Donald Trump announced Wednesday the imposition of those higher tariffs would be delayed by two weeks, to Oct. 15, as a “gesture of good will” as the two nations continue to negotiate a trade agreement. That's encouraging, the outdoor reps said, but more action is needed.
Another round of tariffs, also affecting outdoor products, is slated for December, industry leaders said. Eventually, those tariffs are going to be passed on to consumers, increasing prices on some products by as much as 50%, they predicted.
Patricia Rojas-Ungar, the Outdoor Industry Association's vice president of government affairs, said that over the past year, the industry has shelled out $1.8 billion more in tariffs than in the previous year, and since the start of the trade war, tariffs have cost the industry $2.8 billion more.
That’s leading some companies to make hard decisions about innovation and jobs.
Brent Merriam, CEO of Nemo Equipment, based in New Hampshire, said his company, which makes sleeping bags and tents, has paid out $175,000 in punitive tariffs, forcing him to put on hold hiring for high-paying jobs, such as an international sales director.
The company also has delayed plans to invest in a research and development lab that would help grow its product pipeline, which he attributed to uncertainty over future tariffs.
Merriam also addressed comments by Trump that U.S. companies should just move out of China. Nemo has done some of that, he said, but “it’s taken a toll” from moving production to other countries and the costs to train the workers. It’s forced Nemo to redirect resources to find new supply chains instead of innovating new products, he said.
“I’m concerned it will hurt us” in a couple of years, he said.
VF Corp., owner of outdoor brands like Timberland and The North Face and sponsor of the recently-concluded Colorado Classic women's pro cycling race, has just moved its corporate headquarters to Denver. But Joel Cohen, who manages government affairs for VF, said the tariffs are slowing the company’s efforts to hire new employees, especially entry-level positions.
“Tariffs are putting a strain on our plans for the future,” Cohen said.
Even companies that manufacture in the United States are feeling the pinch, and claim the tariffs are resulting in an incentive to move jobs out of the United States rather than creating more jobs here.
Nester Hosiery manufactures 10 million socks per year in North Carolina, with 90% sold in the United States. But the tariffs are hitting that company hard on the Merino wool it imports from China, said Katie Kumerow, Nester’s sustainability manager. The tariff on wool is 25%, but on manufactured socks it’s just 10%, which she called an incentive to buy finished products from China instead of making them in North Carolina. That’s money that could be spent on jobs and innovation, she said.
Rojas-Ungar of the Outdoor Industry Association said the message the industry is sending to the Trump administration is to conclude the agreement with China, and if that doesn’t happen, Congress should step in and assert its long-time trade authority, which so far it hasn't done.
They’re also asking Congress to hold hearings on the impact of the tariffs on American families and businesses.
“Not one hearing has been proposed to talk about what’s happening on the ground,” she said. “We’d like to see more members of Congress talking about this” and to find an alternative solution to pressure the Chinese government on a deal rather than using tariffs, she added.