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Leather sector now a target as US-China trade war ramps us

Retaliatory measures from China to the imposition of a hike in tariffs on its exports to the US look likely to result in a new increases affecting a long list of additional products. This time, hides and leather could be among the products affected.

In April, the US gave notice of its intention to impose additional tariffs of 25% on an initial list of more than 1,300 products it brings in from China, products with an estimated annual value to Chinese exporters of $50 billion. The office of the US Trade Representative (USTR) said these measures were a response to “certain acts, policies, and practices of the government of China related to technology transfer, intellectual property, and innovation”. These measures came into force on July 6.

By then, China had announced a series of retaliatory measures, imposing increased duties on a series of products shipped to China from the US, calculating a total value of $50 billion, matching the trade values targeted by the US. Up to this point, while some pork products formed part of the tariff tit-for-tat, beef, hides and leather trade remained unaffected.

However, in light of China’s retaliation, the US is now examining the possibility of imposing 10% tariffs on a further list of 6,000 products it imports from China with a total trade value of $200 billion per year. This proposed “supplemental action” is now the subject of a public consultation exercise and USTR has given businesses and members of the public until August 17 to submit comments. It will then hold a hearing on August 20.

This time, there are several hide, skins and leather products on the list. Imports from China of leather value chain products including finished, crust and wet blue whole bovine hides, buffalo hides and equine hides are there, as are semi-finished sheep, lamb and goatskins. A number of categories of leather chemicals are also on the list.

In addition, the new list includes leather handbags, trunks and suitcases, small leathergoods such as keyrings, leather golf bags, leather garments, gloves, belts and leather shoelaces.

The implications of these proposed measures for the leather industry are significant.

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