Shoemakers in the United States are facing losses over the tit-for-tat tariffs amid the trade tension between China and the U.S.
Xero Shoes is an American brand of lightweight minimalist footwear designed for walking, running and athletics. According to Steven Sashen, CEO of the company, their shoes and sandals have thin and flexible soles that are contoured to the shape of the human foot.
“It really reflects the essence of what we’re doing, which is something so lightweight, so minimalist, so barely there that you don’t know that it exists,” said Sashen.
Sashen started the company with his wife Lena Phoenix 10 years ago. Their 80-percent online business has taken off with 84-percent growth in the past four years.
Yet as another round of U.S. tariff took effect from early September, Sashen’s products are now 15 percent more expensive to import from China, where all of his shoes are made.
Lena Phoenix, co-founder of Xero Shoes, says one possible solution is to uproot their supply chain. Yet such move would take time and it isn’t as easy as it sounds.
“We don’t want to leave China. Moving factories is very dangerous for a company of our size,” said Phoenix.
“People just say very casually: well why don’t you move to Vietnam for example? Well, cause Vietnam is full. They’re overcapacity already,” said Sashen.
They’ve also thought about raising shoe prices in response to the tariff.
“While we have a rabid fan base and many people say we’re happy to pay a few dollars more. That’s what people love to say, but when push comes to shove, people are very price-conscious,” said Sashen.
“We’re going to hold prices as long as we can,” said Phoenix.
Sashen and Phoenix are not the only ones facing such dilemma. Xero joined forces with about 200 other footwear companies to write to President Trump last month, urging him to cancel the newly planned additional tariffs on goods imported from China.
The letter points out that the tariffs on footwear products imported from China are already at a high level of 11 percent on average, and will reach 67 percent on some shoes after the new tariffs take effect.
According to the letter, the 15 percent tariff will cost U.S. shoe consumers an additional four billion U.S. dollars every year, which may create further economic uncertainty.
“It’s almost impossible to come up with a coherent strategy because of how in flux all of this is,” said Sashen.
Xero is now trying to come up with a long-range manufacturing plan.
“It forces you to step out of your comfort zone and be innovative and thoughtful about how to go forward long-term,” said Michael Wellman, the vice president of the company’s Asia Pacific Development.
Meanwhile, the shoe-makers are also hoping for near-term relief for the footwear industry, which was relatively highly taxed even before the trade war picked up speed.
“There’s a part of me that’s still in denial, that hopes that it’s going to be resolved next month,” said Phoenix. (REUTERS)
MANILA, Philippines – Some senators are seeking to probe a deal signed between the Armed Forces of the Philippines (AFP) and China-linked Dito Telecommunity Corp. (formerly Mislatel Consortium) amid concerns that the agreement could pose a threat to national security.
Opposition Senator Risa Hontiveros on Tuesday said she has filed Senate Resolution No. 137 after Department of National Defense (DND) Secretary Delfin Lorenzana stated that he was not aware of the said agreement, which allows Dito Telecommunity, the country’s third major telecommunications player, to rent spaces where they can set up equipment and other facilities inside military bases across the country.
Dito is a company comprised of Udenna Corporation, led by businessman Dennis Uy, and China Telecom.
“Is there now a ‘sign first, worry about security later’ policy under this administration?” Hontiveros said in a statement.
“Ito na ang pangalawang beses na hindi nakonsulta ang defense secretary tungkol sa mga diumanong Chinese deals na pinapasok ng ating pamahalaan na may seryosong implikasyon sa ating pambansang seguridad,” she added.
Hontiveros further said that entering into a deal with a Chinese-linked firm is “irresponsible” amid continuing maritime disputes between the Philippines and China in the West Philippine Sea.
“Sa isang panahon na patuloy ang panghihimasok ng Tsina sa West Philippine Sea, napaka-iresponsable na pumasok tayo sa mga kasunduan sa kanila na hindi sinusuri ang epekto nito sa ating pambansang seguridad at kaligtasan,” Hontiveros added.
(In this time when China continues to infiltrate the West Philippine Sea, it is irresponsible for us to enter a deal with them without scrutinizing its effects on our national security and safety.)
The senator cited Article 7 of China’s National Intelligence Law which states that Chinese organizations and citizens are obligated to support “state-intelligence gathering efforts.”
Hontiveros said that under China’s law, Chinese corporations cannot refuse to assist such acts of espionage, since its Counter-Espionage Law requires that “when the state security organ investigates and understands the situation of espionage and collects relevant evidence, the relevant organizations and individuals shall provide it truthfully and may not refuse.”
“There is an urgent need to determine whether or not the presence of Chinese facilities in military bases and installations undermines national security and whether or not the lease agreements entered into for this purpose comply with applicable law,” she said.
The lawmaker added the agreement may be violating the Public Land Act which states that “military reservations cannot be subject to lease, occupation, entry, sale, or other disposition, until declared alienable by provisions of the Act or by proclamation by the President,” and the AFP Modernization Act, which states that any “sale, lease or joint development of military reservations must be authorized by Congress.”
Senator Francis Pangilinan agreed with Hontiveros’ sentiments.
In a statement, Pangilinan pointed out that two high-ranking government officials, Lorenzana and National Security Adviser Hermogenes Esperon, have earlier raised concerns on issues involving China, including the proximity of Chinese-dominated offshore gaming operators’ hubs to military camps and the influx of thousands of its nationals in the country.
“Hindi biro itong China telco involvement dito sa ating military camps,” Pangilinan said.
(This Chinese telco’s involvement in our military camps is no joke.)
“Ang concern: gagamitin nung Chinese government yung information na nakukuha [at] dumadaan doon sa kanilang mga sistema para itulak ang interes ng China,” he added.
(The concern is the Chinese government will use the information that passes through their system to advance China’s interests.)
The senator stressed the security risk is not a mere speculation, citing the move of other countries such as Australia, the United States, Japan and New Zealand to ban Chinese telecom giant Huawei due to security concerns.
Pro-Beijing supporters flooded into a Hong Kong shopping mall waving China flags and singing the Chinese national anthem on Friday (September 13) where they were confronted by with anti-Beijing groups.
The confrontation came hours before a city-wide Mid-Autumn festival celebration where demonstrators are set to carry lanterns and form human chains on the scenic Victoria Peak, an area popular with mainland Chinese tour groups. The human chain is also due to be formed on Lion Rock which separates the New Territories from the Kowloon peninsula.
The anti-China demonstrations started in June in response to a bill that would have allowed people to be sent to mainland China for trial in Communist Party-controlled courts, but have broadened into calls for democracy.
China says Hong Kong is now its internal affair. It denies meddling in Hong Kong and has accused the United States, Britain and others of fomenting the unrest.
Britain says it has a legal responsibility to ensure China abides by its obligations under the Joint Declaration. (REUTERS)
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