New Balance Athletics Inc. has long advocated and benefited from tariffs, competing with Nike Inc. and other footwear companies while still making shoes in the U.S. Now, it’s among the critics of President Donald Trump’s duties testifying at a public hearing starting Monday.
The Boston-based firm said while it supports Trump’s efforts to force China to address intellectual property theft in a trade deal, its U.S. factories are supported by a global supply chain connected to China and built over decades. Duties on soles and other components would hurt the business, as do China’s retaliatory tariffs on U.S. exports, the company said.
Trump’s proposed levies “will not just translate into higher costs, but jeopardize our ability to maintain production levels and continue investing in our domestic factories,” New Balance Vice President Monica Gorman said in comments posted online.
The footwear firm is among the U.S. companies lining up for the hearing to drive home a now-common point: Trump’s proposed tariffs are bad for business. But the stakes have never been higher, with the latest wave of threatened duties set to hit essentially all remaining imports from China including mobile phones, laptops, apparel and other consumer items.
New Balance has long pushed to supply U.S.-made shoes to the Pentagon and argued against reducing tariffs on imported finished footwear when the U.S. was negotiating the Trans-Pacific Partnership with 11 other nations earlier this decade. But Trump withdrew from the TPP in 2017, and his use of tariffs on goods and components has drawn opposition from a swath of U.S. companies and industries.
About 320 officials from U.S. manufacturers, retailers and other companies and trade groups are set to appear over seven days of a hearing. While some companies including Rheem Manufacturing Co. support the duties, most are arguing that Trump shouldn’t tax their products.
While Trump likes to say China is paying the tariffs, economists say it’s U.S. importers that pay them and some of that gets passed to consumers in higher prices. Companies also say they can’t easily avoid them by moving operations outside China, as the president suggests.
It’s the fourth round of hearings, after Trump levied duties on $250 billion of products last year. As talks on a trade deal with China faltered last month, he ordered a tariff increase to 25% from 10% on $200 billion of goods and targeted an additional $300 billion in products -- including consumer goods the administration tried to spare in previous rounds.
Hallmark, Forever 21
Some executives are coming to Washington to testify for the fourth time, even though many don’t have much hope of success given that Trump sees tariffs as “beautiful” and leverage for a deal -- especially after he said the threat of duties on Mexico produced an immigration pact. Some firms got goods removed from previous tariff lists, only to have them put back.
Retailers including Best Buy Co. Inc., Jo-Ann Stores LLC and Forever 21 Inc. have asked to testify against duties on goods including computer tablets, smartwatches and artificial plants. Hallmark Cards Inc. said greeting cards and Christmas ornaments should be spared because of the impact on retailers, consumers and even the U.S. Postal Service.