While U.S. and Chinese trade negotiators put their heads together in Washington, members of the U.S. outdoor recreation and snow sports industries are gathering for a big trade show in the state of Colorado.
Parts of those industries have been hit hard by U.S. tariffs on Chinese imports.
CGTN’s Hendrik Sybrandy reports from Denver.
The Outdoor Retailer Snow Show is one of the biggest trade shows of its kind in the world. It’s a place where you can find anything recreation-related under the sun.
It’s a very large show,” Michelle Blate, vice president of Regina Imports which makes high-end footwear, said. “Everyone can see what products are out there under one roof. It makes it easier for the buyers and seeing what’s out there, what’s new.”
Companies exhibiting clothing and gear come face-to-face with buyers for retailers. This year one issue hovers over the convention floor.
“It’s been pretty dramatic,” Dino Dardano, president of glove-maker Hestra, said referring to the 10 percent trade tariffs the U.S. imposed last September on products imported from China. Many of Hestra’s gloves are assembled there.
“It directly hits us at the bottom line,” Dardano said. “You know every dollar I spend for air freight, it definitely affects our profitability.” Dardano flew his goods in bulk out of China to beat the tariff hike. Other firms who manufacture in China have also seen their costs go up.
“Trade is now really at the top of the list for a lot of these companies,” said the Outdoor Industry Association’s Rich Harper. He said the U.S. action came suddenly for makers of things like backpacks, hiking boots and ski jackets, who already pay stiff import taxes.“The tariffs were announced,” Harper said. “That certainly doesn’t give outdoor companies enough time to shift their supply chains. They’ve developed these supply chains over many years.”
The fear now is that those 10 percent tariffs could go up to 25 percent. The U.S. put that increase on hold to allow for more trade negotiations with China. But that moratorium ends at the beginning of March.
“We are in the midst of probably the greatest trade dispute we’ve ever seen in our industry and it’s impacting every one of your businesses,” said the moderator of a trade show panel discussion on China-related tariffs.
Some of those businesses have managed to move production out of China. Many have absorbed the 10 percent tariff but worry that their premium price point for consumers may have to go up soon.
“Normal tariffs and certainly punitive tariffs are nothing more than a tax on people’s ability to participate and get outdoors,” said Patrick Fox with VF Corporation.
“What we don’t want to see happen is that our products end up being priced out of the market,” said the Outdoor Industry Association’s Patricia Rojas-Ungar. Her group is pushing for a quick resolution to the U.S.-China trade issues.
“Luckily it hasn’t affected us yet,” said Zach Hines, co-founder of Ripclear, a U.S. company that makes protective film for ski goggles, made in China. Ripclear protectively raised its prices as the tariffs were rolled out. It’s escaped three rounds of those import duties but Hines wonders if there will be more. “We’ve heard that there may be a full sweeping tariff applied and that could be a problem for us,” Hines said.
It’s a problem for many businesses. As they work to draw even more people outside for fun, they’re taking their lumps because of the trade dispute.
“If this escalates, it’d be an even more significant blow to the industry,” Harper said.