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U.S. retailers face challenges on two fronts: China trade war and covid-19

Stephen Lamar American Apparel and Footwear Association CEO joins Yahoo Finance to weigh in on the state of the retail industry in the U.S.

Video Transcript

JULIE HYMAN: Let's turn now to one of the industries that might stand to benefit from this stimulus. Stephen Lamar is joining us now. He's the American Apparel and Footwear Association CEO. He's joining us from Virginia. Steve, now, you're not-- your industry, thankfully, is not the same boat as industries like airlines, for example, which have pretty much shut down entirely at the early stages of the pandemic. But I imagine that the recovery for your constituents has been uneven. So talk to me about the stakes in terms of stimulus for your members.

STEPHEN LAMAR: Well, the stimulus is very important. The President Trump, I think, tweeted last week, "Go big or go home." Our attitude is "go home" is not an option. It's really just "go big." They need to stay in Washington. They need to get their job done. Stimulus is not a one-and-done thing. It's-- you know, we're talking about the second bill. We should be talking about the third, the fourth, the fifth. We need to stay at the job until-- you know we-- we have to sustain the economy until it can sustain itself.

I think we've talked already the-- COVID is not under control. It's not being managed very well. We need to keep the COVID management better, because that's ultimately going to be our path out of-- out of our economic problems until we can get a vaccine. And until that happens, we have to keep-- keep the economy supported, whether it's workers, its consumers, it's employers, it's the state and local governments. They all need to be helped out through this time, and that's why it's so important that they stay at the job, they stay in that room. Make sure they're wearing masks in that room, by the way, and they can get the job done.

ADAM SHAPIRO: It's crucial. Steve, it's good to see you. Adam here. I'm curious, can you remind us, because we've done this now for more than a year, the tariffs that are still in place, especially as we move into the holiday shopping season, what tariffs are still going to hit us?

STEPHEN LAMAR: Oh, we still have tariffs on a wide variety of products, a wide variety of apparel, footwear, travel goods. Keep in mind, China is our-- still our number one supplier to the US market, and a majority of those products are still seeing tariffs. We have a number of programs that are due to expire during the end of the year. If they expire, tariffs will come back in place. We're still charging tariffs on many items of personal protective equipment. We still have tariffs on reusable isolation gowns. Tariffs on masks are going to go up, incredibly, they're going to go up on January 1.

We-- we have a lot of tariffs that we're still paying. We were never a big fan of tariffs, but during this crisis, this is the wrong time to have tariffs. We can be using those tariffs to pass along savings to consumers to hire workers, not to-- not to pay into these US coffers like this.

JULIA LA ROCHE: Steve, it's Julia La Roche. Let's continue the discussion on tariffs. You're just mentioning things like PPE, for example, the gowns that are used as protective equipment. It's a little alarming, isn't it, to kind of hear that? Do you think that will change? Are-- are you having conversations? What kind of conversations are you having, and what kind of response are you getting?

STEPHEN LAMAR: We-- we get a lot of good-- good responses, actually, from Congress. We think there's going to be legislation that they're going to propose, once, after the elections, when they come back in. You know, congress just passed a legislation that the President signed, unanimously, to continue a trade program with Haiti. So it proves they can get things done, OK?

It proves that they can come together in a bipartisan, bicameral basis. And we think that there is some opportunity to do that as well on-- on making sure that these tariffs don't go up, or that tariffs can come down, especially on items like masks and gowns. So we're hopeful that we can get that done during the lame duck session.

BRIAN CHEUNG: Hey, Steve. Brian Cheung here. It seemed like the supply chain was something that a lot of people had questions about at the onset of this pandemic. It seems like right now things are getting noisy with virus cases going back up in Europe, even in some portions of Asia as well. When you look at the import-export flow, do you see supply chain issues still out there in the economy, global economy, right now, that has impeded pricing power, or even the flow of goods from certain countries' dollars?

STEPHEN LAMAR: Yeah, supply chains are still recovering from the shocks that they've been subjected to over the-- over the last couple of months. You know, it's demand shocks, it's supply shocks. As the-- as the COVID continues to spike in different places, that's having an impact on both demand and supply in-- in countries all around the world.

The good news is, is we have fairly resilient supply chains, and companies are really putting in place a lot of procedures to make sure that-- that these supply chains can sustain themselves better as COVID continues to-- continues to run amok. And our hope is that we can all, you know, concentrate on getting COVID controlled through common sense procedures like, again, wearing masks, social distancing, but then through them more permanent things like-- like finding a vaccine. And until that happens, we're going to have to do our best on a day-by-day basis to manage these supply chains.

JULIE HYMAN: Steve, finally, as you're talking about supply chains, as you're talking about the tariffs that your industry is still paying leads me to wonder, did we lose the trade war amidst all the back and forth? Did the US come out on top?

STEPHEN LAMAR: Well, nobody wins a trade war. What-- what happened in this trade war is we impose tariffs the Chinese imposed tariffs back on us. And so, we are paying tariffs on products that we're importing, we're paying tariffs on products that we're exporting using market share. You know, there are some-- there was a phase one agreement, which did provide some-- some good opportunities going forward, but we're still paying all of those tariffs.

They're still in place. There's no prospects on when we're going to see a phase two. And the President's been talking about doing a similar investigation on Vietnam, which is our number two supplier of apparel footwear and travel goods. So you know, we've seen this movie before. We can see this investigation. The investigation results in tariffs, tariffs beget more tariffs, and tariffs are really just taxes on companies, workers, and you and me.

So we're really hoping that we can move away from this tariff model, and move into a model where we actually sit down and work with our trading partners to resolve distances-- resolve differences at the underlying stages there.

JULIE HYMAN: Yes, well we'll see, if there is a change in administration, if that happens or not. Steve Lamar, gotta leave it there. Thank you, American Apparel Footwear Association CEO.