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Will inflation see off the Trump tariffs?

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Clothing executives and industry leaders lobbying for action on tariffs think the inflation angle could be especially compelling for Biden, who regularly touts his middle-class roots and likes to champion American families. The President’s approval rating has been plummeting, in part because of higher prices. Tariffs have a direct impact on those prices, as treasury secretary Janet Yellen acknowledged in November. For apparel goods imported from China, 301 tariffs can add from 7.5 per cent to 25 per cent in duties that manufacturers and importers must pay — a cost usually passed on to the consumer.

The Trump administration implemented its Section 301 tariffs in 2019 on a range of goods. At the time, the Chinese retaliated with tariffs of their own, targeting US-made goods and sparking a trade war. When Biden took office, the US apparel industry expected the tariffs to be rolled back. The industry is still waiting.

In the meantime, some remedies are possible, both short- and long-term. A handful of US apparel companies and importers have secured relief by applying for exclusion from the tariffs. Companies and importers — which may include farmers, retailers and manufacturers — can seek a lifting of the tariffs under Section 301 on individual items, although not product lines, with the stipulation that the goods can only be produced in China and that the tariffs would cause harm to the US. However, very few US companies have been able to seek tariff relief because the programme is open to so few.

US trade representative Katherine Tai hinted in October that her office may expand that list. “We will start a targeted tariff exclusion process,” she said. “We will ensure that the existing enforcement structure optimally serves our economic interests. We will keep open the potential for additional exclusion processes, as warranted.”

The latest application process was wrapped up on 1 December for some 549 products that could win approval for temporary exclusion from tariffs covered by Section 301. Among those applicants are slow-fashion brand Mikumo Apparel; Eastern Silk Mills, which imports silk fabric; and Pawstar Inc., which buys Chinese long-pile synthetic fur.

“The first solution is whatever relief the administration provides on its own, either through the exclusions process [Section 301] or by walking back the tariffs,” says AAFA’s Lamar. “The other relief would be if Congress would pass legislation directing one of those outcomes.”