Colorado Politics

Outdoor equipment industry warns of higher prices if another round of China tariffs are imposed by Trump administration

The companies that make your favorite bike helmets, wool sweaters, sleeping bags and other outdoor recreation gear are sounding the alarm on another round of tariffs, to be imposed by the Trump administration on Dec. 15. And one manufacturer said companies are running out of options that would keep those costs from being passed on to consumers.

The new round of tariffs, known as List 4B, will slap another 15% on China imports. The Outdoor Industry Association , the industry trade association based in Boulder which represents some 1,300 companies, assembled representatives from large and small businesses that manufacture outdoor gear to talk about those impacts Tuesday.

According to an OIA report also released on Tuesday, outdoor recreation equipment companies have been hit by an “avalanche” of tariffs, $2.6 billion higher than a year ago.

The most recent round of tariffs imposed by the Trump administration in September more than tripled the costs American businesses pay, $4.1 billion, up from $1.3 billion in August, the report said. Companies that make hiking boots, ski jackets and ski pants were among the hardest hit in the outdoor equipment industry from that round of tariffs.

For example, according to Patricia Rojas-Ungar, vice president of governmental affairs for OIA, tariffs on hiking boots were 37.5% before the September round; now it’s at 52.5%, she said.

“The avalanche of tariffs will keep building as outdoor companies brace for another 15% on outdoor products expected on December 15,” Unger said. That includes sleeping bags, lantern, grills and more outdoor equipment and footwear.

For the first time, safety helmets will also be hit by tariffs. Vista Outdoors manufactures some of the nation’s best-known helmet brands, including Bell, Giro, and Raskullz and for bike, snow, powersports and children. Fred Ferguson, vice president for public affairs at Vista, said safety gear had previously been exempted from the tariffs. His company applied for that exemption and it had been adjudicated in their favor. But with the December list, that deal vanished.

“From the public policy side, there’s no rhyme or reason to it,” he said.

Helmets aren’t the only safety equipment that will be hit with tariffs in December. According to Sarah Bowersox, global compliance manager for Keen, a footwear company in Portland, Ore., in December, utility boots with metal-protected toecaps, the kind of footwear used in construction and industrial companies, will also see that 15% tariff for the first time.

Gale Ross, the chief operating officer for Krimson Klover of Boulder, said her company had their fall 2019 and spring 2020 lines already in progress when the September tariffs were announced, so her company and its five manufacturing facilities in China ate the costs of the tariffs. That won’t happen for the fall 2020 line – they make wool sweaters and dresses – and those costs are being passed on to consumers.

If the point of tariffs – as some have claimed – is to get American companies to move production out of China, it isn’t easy, according to some of the company representatives.

Ross said they looked at a factory in Mexico, and then came the possibility of tariffs being imposed on Mexican imports. She looked at moving production to Denver, but said that while the pricing worked, it would take the Denver factory a year to make what her China factories produce in four months. She’s also had to put hiring on hold at her Boulder headquarters, she said.

Ferguson of Vista said they’re running out of time and options. “We have had to raise prices, and that’s led to reduced sales and profitability and reductions in the workforce.” At one Vista company, Camp Chef, which makes camping grills, they’ve never before had to let employees go, Ferguson said.

Is a trade deal eminent? “That’s what we’re hearing,” said Rojas-Ungar of OIA. But “we can’t count on projections. These are real-life impacts, tariffs being paid on a day-to-day basis.”

And while a “phase one” trade deal with China has been hinted at by the Trump administration in recent weeks, President Trump threatened yet more tariffs against China in a cabinet meeting Tuesday morning.

In September, OIA and its member companies called on Congress to take action if the administration didn’t. Rich Harper, manager of international trade at OIA, told Colorado Politics on Tuesday that Congress has yet to take action, although legislation introduced in June in the House by Rep. Stephanie Murphy (D-Fla) and in the Senate by Sen. Tim Kaine (D-Va.) seeks to impose more congressional oversight on tariffs of all kinds, including on steel and aluminum.

“There’s still an urgent need for congressional oversight and review of tariffs,” Harper said. “We will continue to press Congress to support legislation” like the bills offered by Murphy and Kaine.

He said other proposals, such as a bill focused on national security issues tied to tariffs from Sen Chuck Grassley (R-Iowa), whose state has been hit hard by tariffs on soybeans, is also possible. 

USA and China trade war. US of America and chinese flags crashed containers on sky at sunset background. 3d illustration
(Illustration by Rawf8)
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