Tariffs on Chinese goods have outdoor industry speaking in opposition
September 1, 2018
For the past couple of weeks, representatives from U.S. companies and organizations have flocked to Washington, D.C., to oppose the Trump administration's proposed tariffs on $200 billion worth of goods produced in China.
The tariffs, which are expected to be set at a rate of between 10 and 25 percent, would affect numerous companies across the country, from wood flooring businesses to retailers of outdoor goods. Park City organizations in the outdoor industry are among those stepping up to voice their opposition.
Upon hearing of the proposed tariffs a few months ago, Nick Sargent, president of Park City-based trade organization Snowsports Industries America, immediately reached out to members and asked for their signatures on a letter to the Office of the U.S. Trade Representative. Then, on Aug. 27, he flew to D.C. to testify in front of the International Trade Commission.
Ski gloves, hats, head gear, helmets and sports bags are all on the list of products expected to be hit with tariffs. Sargent said in his letter that the tariffs would "cause disproportionate harm to U.S. economic interests" if they were implemented. The Trump administration said the end goal of the tariffs is to have China agree to changing its intellectual property practices and industrial policies, along with other trade practices the U.S. has deemed unfair.
POC, a Swedish-based company with a corporate office in Park City, sells safety-focused products for snow sports and biking. Ben Coates, the managing director of POC, said the tariffs would affect nearly every one of the company's products, including helmets, gloves and apparel. Even though eyewear is not on the list, there is a possibility the materials used to make those goods would be affected as well.
"We are looking at it as an across-the-board tariff being levied on our business," he said.
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Coates said the tariffs would do more harm than good and would not encourage companies to move their manufacturing to the U.S., which the Trump administration has said was one of the intentions of recently introduced tariffs on steel and aluminum. Coates said the infrastructure to manufacture those goods in the U.S. is not in place.
"The chances of helmet manufacturers being able to bring helmet production back to the U.S. is limited, if at all (possible)," he said. "More or less, what it does is it increases the price of goods, which the manufacturer is either going to have to eat or it is going to be passed onto the consumer."
He said that operating budgets and profit margins in the snow sports and bike industries are already low, so passing the increase onto the consumer would almost be guaranteed.
If that cost goes up, he worries that people participating in outdoor recreation activities will simply not buy protection equipment, such as helmets. That, he said, would be a "net negative for the world."
Sargent said that the price of a helmet jumping from $200 to $220 or $250 could cause sticker shock for consumers and encourage them to hold off on purchasing new gear.
"That decision process will have a direct effect on the retailer who's trying to sell a product, and then trying to pay a manufacturer," he said. "SIA and our members and the winter industry oppose this tariff."
He said the tariffs could have rippling effects in the industry if small and medium-sized retailers are not able to survive a drop in sales. Some might be forced to close.
"Dollars that winter vacationers spend each season supports our local economies, specifically the small businesses that depend on a strong sell through each very short season to bridge them to the next season," he said in his letter to the Office of the U.S. Trade Representative. "These seasonal dollars support the families behind these small businesses for the entire year. However, with these tariffs, and the increased prices that will certainly follow, I'm afraid that the small businesses and the jobs in these communities are in jeopardy."
Sargent said Utah would especially be impacted, since tourists come from all over the world to ski and snowboard at its resorts and inevitably buy products.
Mike Nelson, co-founder of Park City-based Destroyer Equipment, said the tariffs would be a major challenge because of the company's size. Destroyer sells skateboarding, snowboarding and mountain biking gear, including helmets.
"We're a very small player and when you're as small as we are, we need every opportunity we can get to try to be competitive," he said. "We don't currently have the volume to try to spread an increase like this across. This is the kind of stuff that makes things really difficult for small brands like Destroyer."
SIA gathered several signatures from its members until Aug. 31 and intends to send the petition to the Office of U.S. Trade Representative before the public comment period ends on Sept. 6. In the coming days, SIA and other organizations, including POC, plan to attend a Utah outdoor leadership conference, during which they will express their thoughts about the tariffs.
After that, Sargent said, the only thing companies concerned about the tariffs can do is wait.