Trade Wars And Tariffs Are Coming Soon. Which Sporting Goods Will Face Challenges?

In May 13th, the Ministry of Finance issued the announcement of the Customs Tariff Commission of the State Council on raising the tariff rate on some imported commodities originating in the United States.

In May 9, 2019, the US government announced that since May 10, 2019, tariff rates on goods imported from China for 200 billion US dollars have been raised from 10% to 25%.

The US side's measures have led to the escalation of Sino US economic and trade frictions, violating the consensus between China and the United States on resolving trade disputes through consultation and damaging the interests of both sides, which do not meet the general expectations of the international community.

In accordance with the laws and regulations of the People's Republic of China foreign trade law and the People's Republic of China import and export tariff Ordinance and the basic principles of international law, the Customs Tariff Commission of the State Council has decided to increase the tariff rate on some imported commodities originating in the United States since 0 June 1, 2019.

In September last year, Trump imposed 10% tariffs on Chinese products worth 200 billion US dollars each year. China's Countermove was to levy 5% to 10% tariffs on us products worth $60 billion each year.

The Ministry of Finance announced on Monday that it would levy tariffs on four new categories of goods valued at $60 billion.

The tariff rates of these four categories of products are 25%, 20%, 10% and 5% respectively.

Among them, there are many sports and sports related commodities. According to the lazy bear sports statistics, there are about 60 kinds of direct related commodities, which are basically consistent with the list of tariffs added in August last year.

In the "list of 25% tariff goods added to the United States", there are sports shoes, ski suits, swimsuits, basketball, soccer, volleyball, table tennis, tennis racquets, windsurfing, etc. in the list of 20% duty goods added to the United States, there are golf clubs, golf balls, skates and so on. In the list of 10% tariff goods added to the United States, there are treadmills, other fitness and rehabilitation equipment, skateboards, general sports activities, gymnastics or sporting goods. In the list of 5% duty goods added to the United States, there are recreational or sports inflatable speedboats, rowing boats and light boats.

If the Sino US trade negotiations fail to reach a further consensus in the near future, the additional tariffs will be implemented in June 1, 2019.

For the detailed commodities involved, lazy bear sports did the following.

What needs to be explained is that the content we are arranging is directly related to sports, and does not involve non direct related contents such as production materials of sports products.

It is worth mentioning that the key to product taxation is to look at the place of production, and the goods originating in the United States will be subject to tax increases.

Take NBA as an example, most of the NBA related products currently sold in China are produced in China, so there will be no increase in taxes due to this levy. There are other players, such as jerseys worn by players in the competition, Autographed products of stars, etc., which may be subject to tax increases.

In addition, the published tariff list does not involve non entity products, such as sports copyright.

In the US, the sports brand industry is also worried about the Sino US trade war.

Sports shoes were also listed in the US $300 billion tariff list issued by the US Trade Representative Office (USTR) in May 14, 2019.

According to the statistics of American Apparel&Footwear Association, 98% of the shoes sold in the US market are produced abroad, of which nearly 3/4 come from China, making footwear one of the most imported products.

Although shoes and clothing enterprises have been trying to pfer more business to Vietnam and Kampuchea in recent years, shoe companies still rely heavily on Chinese products.

According to the census data of American Enterprise Institute, an American enterprise research institution, in 2017, the United States imported $14 billion 800 million worth of shoes from China, making footwear the fifth largest category of imported footwear in China.

(other major imports: mobile phones 84 billion US dollars; computers $67 billion; toys $28 billion; furniture and bedding $27 billion).

Once the tax increases on the shoes are implemented, the Americans and shoe related enterprises will bear a higher cost of purchase.

The United States clothing and Footwear Association estimates that a 25% increase in tariffs will cost a family of four an additional $500 in the purchase of shoes and clothing.

Last year, dozens of American footwear related enterprises such as Nike and Under Armour wrote a letter to President Trump in March last year to oppose more shoe duties.

They said, "increasing more tariffs will mean an increase in the cost of footwear consumers, and a reduction in employment opportunities in the United States. Any action taken to increase China's footwear tariffs will have a direct and lasting impact on the individual and family of the United States."