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What Are Tariffs On China Costing American Businesses?


President Trump announced Thursday that the U.S. will move forward with an additional 10% tariff on an additional $300 billion worth of Chinese imports. The tariffs are set to take effect on September 1. American consumers are already paying higher cost for some goods because of tariffs imposed previously, but they may not know it. This time, analysts say the price hikes will be hard to miss because the new tariffs are aimed at clothes, footwear, toys, school supplies and your Apple iPhone.

Now, some retailers have been reticent about talking about this but not Tim Boyle. He is the president and CEO of Columbia Sportswear, which sells a lot of the things we just talked about - clothes and shoes. He issued a statement saying this round will be, quote, "a disaster for the American economy, employers and consumers," unquote. And he's with us now. Mr. Boyle, thanks so much for talking with us.

TIM BOYLE: I'm happy to join you.

MARTIN: Again, could you just describe for people how these tariffs work and what the cost will be to consumers? Because the president has insisted all along that the trade wars - you know, trade wars are easy to win and that the Chinese will be bearing the brunt of this. So could you just explain for people who do not understand this how this actually works and what cost American consumers will be paying?

BOYLE: Certainly. Well, you know, our categories of merchandise, which are footwear and apparel, have been heavily tariffed since the '30s, since the Hoover administration. So we're quite adept at working with them and building in the costs of those tariffs into the merchandise that we sell. So American consumers have already been paying significant taxes to the government, and some of the merchandise that we import and distribute through United States carry duties as high as 37.5%. So the concept that somebody else is paying these duties is just - is fallacious. So it's possible that, in some categories of merchandise, that American consumers would be paying - half of the price that they pay for the item is going to be tariff taxes.

MARTIN: It's my understanding that, under the law, companies can apply for exemptions. Is that a possibility for you?

BOYLE: We may, but the chances of us getting these exemptions are almost impossible in my opinion.

MARTIN: How come?

BOYLE: Well, just to get in line to ask for these exemptions is a significant process. On the earlier rounds of tariffs, the number of adjudicated cases was small, and the amount that were adjudicated in favor of the importer was even smaller.

MARTIN: You also talked about in your statement that the question of uncertainty. Well, you pointed out several points. You said that footwear and apparel, like you just told us, are some of the most highly taxed products in the United States already. But you also raise the idea of the uncertainty. You said that raising tariff creates uncertainty, which makes it difficult for American business to make investments that continue to grow the U.S. economy. Can you just talk a little bit about that? Like what - tell me how that works.

BOYLE: Well, many of the product categories that we build are seasonal, and the bulk of it is selling through stores like Kohl's or Dick's Sporting Goods or Recreational Equipment, REI. And these people buy the merchandise in advance from us and then we build the product for it and deliver it to them. So we're in a position where we are not able to, with certainty, tell one of our customers what they're going to be paying for this merchandise. So the ability for us to design and manufacture a product and have it with certainty in a certain destination is significantly hindered.

MARTIN: And before we let you go, has anybody from the administration reached out to companies like yours or your industry group, people who - whose businesses are likely to be heavily affected by this?

BOYLE: Well, we've spoken to our delegation in D.C. about the topic. And they know well our feelings. We've had a proposed scheduled meeting with Mr. Kudlow, which has not happened. It's been on the calendar a few times. So the answer's no. I haven't spoken to anybody in the administration.

MARTIN: That's Tim Boyle, the president and CEO of Columbia Sportswear company. Mr. Boyle, thanks so much for talking with us. I hope we'll talk again.

BOYLE: Thank you. Transcript provided by NPR, Copyright NPR.