'Not going to happen': Billionaire CEO shreds Trump’s biggest argument in favor of tariffs
Timothy Boyle – the billionaire CEO of publicly traded apparel giant Columbia Sportswear — thinks the central argument President-elect Donald Trump is making in favor of new tariffs is bogus.
Trump has proposed tariffs of 25 percent on goods imported from Canada and Mexico, and 10 percent on Chinese imports. In October, Trump told Bloomberg editor-in-chief John Micklethwait that he expected there to be a boom in U.S. manufacturing as companies considered their business strategy in the wake of significant new tariffs. But Boyle said Trump lacks a basic understanding of how corporations operate on a global scale.
In a Tuesday interview with CNN, Boyle explained that his company is already one of the "largest duty payers and tariff payers in the United States," and that a potential new tariff imposed by the incoming Trump administration would only harm his customers, rather than foreign countries exporting goods.
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"We're used to dealing with significant tariffs. They have not driven production into the U.S., even though some of the tariffs are as high as nearly 40 percent," he said. "So we don't think there's going to be any movement to be building products that we sell in the U.S. There will just be higher prices for consumers."
Boyle pointed out that over the last 50 years, "nearly 100 percent" of apparel and footwear manufacturing has moved to Asia. He said this is partly due to lower labor costs, but also because the technology involved in processing textile fabrics, and the "art of tailoring" is also based in Asian countries.
"So to be moving products and production back here in the U.S., is not going to happen," Boyle said, noting that the profit margins his company and others aim for don't allow him to "eat" the cost of new tariffs. "Today, consumers are paying the tariffs. and when they buy products that are made offshore, they're they're paying significant tariffs, which are included in the products... The costs are going to be passed on to the consumer just the way they are today."
Even though Boyle runs a global brand, American small business owners share similar concerns about Trump's tariffs. Jacob Rheuban, who is the president of Prevelo Bikes, recently told AlterNet that he also imports a lot of his raw materials like tires and brakes from Asia. He added that it will be difficult for him to keep prices where they are if he suddenly has to pay more to source parts for his company's products.
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Watch the video of Boyle's interview below, or by clicking this link.
