Biden’s New Trade Philosophy: A Help or a Hurt for American Retailers?

The Biden Administration’s new approach to trade has raised concerns among American retailers, who fear that the changes may harm their businesses. The administration’s focus on creating a global middle class and redefining the word “people” to include not just consumers but also producers has led some to worry that traditional trade deals may be neglected in favor of theoretical concepts.

Speaking at the National Press Club in Washington, United States Trade Representative Katherine Tai called for a shift in current trade policy away from a narrow focus on creating benefits for consumers. She argued that the pursuit of efficiency and low costs has led to vulnerable and high-risk supply chains and a race to the bottom, where exploitation is rewarded and high standards are abandoned to compete and survive. Instead, the Biden Administration aims to use trade as a race to the top.

However, many retailers believe that this new philosophy may not work for all sectors of retail, such as apparel, footwear, and accessories, which are highly import-dependent. They argue that the government should focus on resolving current trade problems before experimenting with new philosophies.

Retailers face a range of challenges, including the need to renew trade programs, expunge extra tariffs, and address the issue of two million uninspected packages arriving daily under the di minimis program. In addition, American seaports remain out of control, and there is a lack of clarity around the qualification of inbound products and testing for their authenticity.

Moreover, while the government encourages brands to make and procure items in the USA, the cost of production remains high, and productivity is low. Retailers also face obstacles when trying to source products from countries like China, Ethiopia, Haiti, and Nicaragua, where political instability and trade agreement uncertainties make it difficult to plan for the future.

In conclusion, while the Biden Administration’s focus on creating a global middle class and promoting high standards in trade is commendable, retailers are concerned that the changes may harm their businesses. They urge the government to prioritize resolving current trade problems and provide clarity around trade agreements to help them plan for the future.

Source: https://www.forbes.com/sites/rickhelfenbein/2023/06/20/retail-alert-team-biden-is-changing-your-trade-policy/?sh=34d7060e7b0c