Why trade matters to retail
NRF believes the United States needs a 21st century trade policy that recognizes that imports lower the cost of living for all Americans and support millions of U.S. jobs in fields such as research, design, sourcing, compliance, finance, ecommerce, distribution, transportation, merchandising and sales.
- Retailers rely on imported merchandise to provide American families products they need at prices they can afford.
- From clothing and footwear to electronics and home goods, many consumer products are no longer mass-produced in the United States, leaving foreign manufacturers as the only available sources.
- It would take years to re-establish U.S. manufacturing of those products. Even if that could be done, modern factories would be highly automated and provide relatively few jobs.
Trade barriers such as tariffs, which are hidden taxes that drive up the price of imports, or “quotas,” which limit availability of consumer goods by restricting the number of items imported, should be eliminated.
Stopping forced labor
NRF strongly condemns human rights abuses, including forced labor and the persecution and detention of Uyghurs and other ethnic minorities in China. NRF believes the U.S. government must take a leadership role in a global approach that mobilizes the Administration and Congress, in conjunction with foreign governments, and engaging and partnering with industry, labor and other important stakeholders. Read the full China Forced Labor Joint Association Response Letter for more information.
China tariffs
A new study commissioned by NRF says a proposal to revoke China’s permanent normal trade relations status would cost U.S. consumers $31 billion in reduced spending power, driving up the price of imported products ranging from T-shirts to microwave ovens by $240 a year for the average family. China has held PNTR since it officially joined the World Trade Organization in 2000 but revoking it would mean higher tariffs on Chinese products imported into the United States. The study examined the impact on five specific consumer categories including toys, furniture, apparel, household appliances and footwear.
“Even though significant efforts have been made in recent years to diversify sourcing, China continues to play an important role in the supply chain,” NRF Vice President of Supply Chain and Customs Policy Jonathan Gold said. “It would be impossible for American families to escape the higher costs from dramatic tariff increases.”
In addition to retail merchandise, revoking PNTR would affect supplies and materials used by U.S. manufacturers, the study says. Prices of those companies’ U.S.-made products would also go up as a result.
The proposal is the latest in a series of efforts to discourage trade with China. From the summer of 2018 through the fall of 2019, former President Trump imposed tariffs ranging from 10% to 25% on more than $500 billion in Chinese imports, saying they were invoked because of China’s unfair trade practices including violation of intellectual property rights and forced technology transfers. China responded at each step with retaliatory tariffs on U.S. exports. Some of the tariffs were reduced in 2020 but the remainder have stayed in effect under the Biden administration, and NRF filed a brief in a lawsuit saying they “have had a significant adverse impact on the U.S. economy.”
NRF agrees that China and other trading partners need to live up to their trade commitments and that China has been a bad actor. But NRF strongly opposes both the tariffs imposed by the United States and the retaliatory tariffs implemented by China. China is perhaps retailers’ most important source of high-quality and affordable consumer products and an important and growing market for U.S. exporters. NRF believes the trade war with China is punishing U.S. consumers more than it is punishing China while doing little to create U.S. jobs because tariffs are essentially a tax paid by U.S. businesses and consumers.
Learn more about China tariffs
Steel and aluminum tariffs
Trump also imposed tariffs on steel and aluminum affecting a wide variety of countries in addition to China. Like the other China tariffs, they drew retaliation and have contributed to the trade war. NRF called the steel and aluminum tariffs a “self-inflicted wound on the nation’s economy” that drive up prices for U.S. consumers on metal-dependent products. The tariffs were brought under a section of trade law involving national security, and NRF has endorsed legislation requiring that security-related tariffs be reviewed by Congress.
More on steel and aluminum tariffs
USMCA (previously NAFTA)
Trump was a longtime critic of the North American Free Trade Agreement, a landmark pact that had boosted trade between the United States, Canada and Mexico since 1994, and ordered that it be renegotiated shortly after taking office. In 2020, a replacement called the United States-Mexico-Canada Agreement won final approval and took effect in July.
NRF agreed that NAFTA needed to be updated to address issues such as digital trade and customs facilitation but strongly opposed Trump’s repeated threats to withdraw from NAFTA without a replacement. NRF welcomed the USMCA, saying it will “provide benefits for decades to come.” Like NAFTA, it is expected to help retailers continue to provide American families with products they need at prices they can afford while enhancing trade between the three countries and supporting U.S. jobs.
Generalized System of Preferences
NRF strongly supports the Generalized System of Preferences, which provides duty-free treatment for 5,000 products from nearly 120 less-developed countries. The program expired at the end of 2020, but legislation has been introduced to retroactively renew it for either four years or six years. NRF supports efforts to update the program to include products that have been statutorily excluded.