Under Armour joins chorus of protest over new China tariffs proposed by Trump

Under Armour has joined other top U.S. footwear brands in criticizing President Donald Trump’s plans to slap punishing tariffs on Chinese imports by Thursday, saying the move would hurt consumers, jobs and business.

A letter signed by the Baltimore-based sports brand along with Nike, Naturalizer, Sperry, Stride Rite, Steve Madden and dozens of other brands says increased tariffs on footwear would amount to “new hidden taxes on every American who buys and sells shoes.”

Footwear makers and retailers argue that shoe imports already face high tariff rates, averaging 11 percent compared with the average tariff of 1.3 percent for all consumers goods. The letter sent to the White House said footwear companies and U.S. consumers paid nearly $3 billion in such tariffs last year and billions upon billions since the tariffs were first enacted in the 1930s.

“U.S. footwear tariffs stifle innovation and job creation and raise the cost of shoes for every American,” the letter said.

Under Armour declined to comment further on the letter.

Administration officials said the president is expected to announce $60 billion in tariffs on Chinese imports of consumer goods and product parts, including apparel, electronics, footwear and home goods. The tariffs are designed to penalize China for intellectual property theft.

Earlier this month, Trump placed steep tariffs on imports of steel and aluminum. The president said the tariffs were needed to protect national security and the nation’s ability to compete, allowing U.S. steel companies to expand production and charge higher prices than they could with overseas competition.

The latest trade measures have spurred an outcry from some of the largest U.S. retail brands. Retailers and manufacturers argue that benefits from tax reform, which those industries supported, would be wiped out by broad tariffs on consumer products. Retailers that oppose the plan include Walmart, Target, Kohl’s, Best Buy, Abercrombie & Fitch, Costco, Macy’s and others.

"As the industry closest to consumers, retailers know firsthand how high tariffs will hurt American families,” said Matthew Shay, president of the National Retail Federation, in a statement. “Americans will see price increases on a wide range of basic products they purchase regularly at their local stores.”

Tariffs imposed on China would have the same effect as a tax on suppliers, increasing suppliers’ costs and leading to higher prices, suppressed demand, lower production and decreased efficiency, said Roger Kashlak, a professor of international business at Loyola University Maryland’s Sellinger School of Business.

“It’s not a good long-term thing,” said Kashlak, who also is an international business professor at Temple University.

Baltimore-based Under Armour has reason to join rivals such as Nike and Converse in opposing a new round of tariffs.

Footwear accounts for a small but expanding chunk of its sales and is seen as a key growth driver as the athletic apparel brand works to rebound from a challenging year.

During the most recent quarter, Under Armour’s shoe sales increase of 9 percent was driven by strength in running category, but offset by declines in team sports and basketball, despite the popularity of its line of Steph Curry shoes.

Most of the brand’s apparel and footwear is made offshore by manufacturers in more than a dozen countries, including China, Jordan, Vietnam and Indonesia.

Under Armour launched a fledgling local-for-local manufacturing initiative in 2016, basing it at UA Lighthouse, a manufacturing and design center in Port Covington. Early last year it began selling its first U.S.-made collection of apparel, including women's sports bras and leggings made at the UA Lighthouse in Baltimore.

“Our companies design and develop the most innovative and sought-after footwear in the world and often face challenges in protecting their designs, patents, and trade dress,” said the letter signed by Under Armour, Nike and others. “We want to work with the Administration to address these challenges and ensure adequate protections for the integrity of our brands. However, increasing tariffs on U.S. companies and consumers penalizes those that are seeking relief.”

lorraine.mirabella@baltsun.com

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