Fashion Intel & Analysis

Today wraps up the seven days of hearings on the China tariffs. More than 300 people traveled from near and far to testify and share stories about how the additional tariffs impact American companies, industries, and consumers. In case you missed it, USFIA testified yesterday and called on the Administration to exempt all clothing, home textiles and footwear from the retaliatory tariffs. In addition to USFIA, apparel, footwear, and consumer product companies continued to speak out in opposition to the tariffs in the final two days of the hearings.  The 301 Committee heard a lot about why infantswear and childrenswear and other important consumer products should be exempt from any additional tariffs. 

Companies spoke about how imposing tariffs on all imports from China will harm their companies and employees, jeopardizing profit and American jobs, while minimally affecting Chinese businesses which are the target of the tariffs. Many were frustrated that they found their products back on the proposed tariff list after being excluded from the first three lists and emphasized that, in addition to hurting American companies, tariffs harm American consumers.

The committee continued to question speakers about the ability to find alternative sourcing options to which speakers all answered similarly; there are no alternatives to replace China. Companies have been seeking ways to diversify their supply chains but shifting a supply chain requires manufacturing capacity, availability of raw materials, regulatory compliance, and time.

Special thanks to all USFIA members and friends who have filed comments, signed an industry level, and testified in person this week in DC.  USFIA will continue to speak out against the tariffs and we will continue to provide updates on the situation.  

U.S. Customs and Border Protection Acting Commissioner John Sanders will step down effective July 5th. CBP has not yet issued an official statement and there are no indications as to who may replace Sanders.  Kevin McAleenan, the confirmed CBP Commissioner, is currently serving as the acting Secretary of the Department of Homeland Security. 

The Democratic presidential candidates believe USMCA needs significant improvements before it goes to Congress for a vote. According to a poll by Citizens Trade Campaign, the 16 candidates- including former Vice President Joe Biden, and Senators Bernie Sanders (D-VT), Elizabeth Warren (D-MA), Kamala Harris (D-CA)- believe USMCA should not be passed until stronger labor and environmental terms with strong enforcement are added to the text. All of the candidates answered unanimously when asked “Do you agree that the revised version of the North American Free Trade Agreement (NAFTA) signed by President Trump on November 30, 2018 should not be enacted unless and until stronger labor and environmental terms with swift and certain enforcement are added and language on pharmaceutical monopolies that locks in high medicine prices is removed?” We will continue to watch as the candidates outline trade priorities in the 2020 presidential campaign. 

This week Mexico’s Senate passed the U.S.-Mexico-Canada Agreement (USMCA), making it the first country to ratify the deal. 

Following the passage, House Ways and Means Ranking Member Kevin Brady (R-TX) released a statement congratulating the Mexican Senate on the vote and encouraged the U.S. Congress to pass USMCA “as soon as possible to unlock the benefits of this agreement for U.S. workers and our local businesses.” 

However, the timeline for a vote on USMCA is still unclear.  While U.S. Trade Representative Robert Lighthizer told lawmakers earlier this week he’s confident he could find a quick solution for Democratic concerns about the agreement, House Ways & Means Trade Subcommittee Chairman Earl Blumenauer (D-OR) said a vote on USMCA is unlikely to happen before Capitol Hill’s August recess. “This is an iterative process and we have lots of people who are expressing concerns and want to make sure this is right. I recognize that there isn’t as much opposition to moving forward with the new version of NAFTA, that there is greater acknowledgment of some problems of the past and some challenges of withdraw … but the leadership has been very clear that they want to make sure that people have their concerns addressed. That is going to take a little bit of time,” Blumenauer said at a Capitol Hill event on Thursday. 

To hear more on the latest updates on the USMCA, be sure to register for our webinar next week, From NAFTA to USMCA: What’s in the Agreement, How Will it Affect Brands & Retailers, and Next Steps

As many USFIA members know, Mediterranean Shipping Company has been suspended from the Customs-Trade Partnership Against Terrorism (CTPAT) after more than 16 tons of cocaine were seized from containers shipped by the carrier to the Port of Philadelphia. The 90-day suspension means the company will no longer receive CTPAT benefits and may result in a delay in shipments. MSC said the company is working to improve supply chain security.  Customs and Border Protection officials have said they do not anticipate serious problems for MSC customers so please let USFIA know if you have any issues.