President Trump’s tariffs create a “no-win situation” for the retail sector, Rick Helfenbein, president and CEO of the American Apparel and Footwear Association (AAFA), told YFi AM, the day after Trump threatened to impose a 5% tariff on all goods entering the U.S. from Mexico. This comes off the heels of Trump authorizing the United States trade representative to take steps to raise tariffs on $300 billion of Chinese goods.
According to Helfenbein, trade between the U.S. and Mexico is worth around $1.8 billion a day. He argues that the 5% U.S. tariffs, plus the cost of any retaliatory tariffs from Mexico, would essentially “blow up the economy.”
“This is not fun, it’s not right, and it’s damaging to our industry, and we’re running out of places to buy goods,” Helfenbein said.
The footwear industry would be hit very hard, Helfenbein said. “China has a 41% market share on apparel, Mexico has an 3.1% market share on U.S. apparel. What we're trying to do as a group is to reduce our exposure to China, and one of the logical places is Mexico … So we're hitting roadblocks in every direction.”
The AAFA, along with the Rubber and Plastic Footwear Manufacturers Association (RPFMA), the Footwear Distributors and Retailers of America (FDRA), the Sports and Fitness Industry Association (SFIA), and the Outdoor Industry Association (OIA) recently sent a letter to Trump urging him not to go through with a proposal that would raise tariffs with China:
"The U.S. footwear domestic manufacturing and U.S. footwear import industries stand united in expressing our grave concerns these tariffs won't help any segment of our industry … for every $1,000,000 worth of necessary and domestically unavailable components our industry imports from China, its costs will rise by $250,000.”
Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.
Read more:
Foot Locker makes $100M bet on popular online sneaker marketplace GOAT
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard,LinkedIn, andreddit.