NRF Not ‘Ready to Go There Yet,’ CEO Says of Court Challenge to Section 301 Tariffs

The National Retail Federation is optimistic about a de-escalation of the U.S.-China trade war but won’t close the door on joining a legal challenge if the Trump administration hikes the 10 percent Section 301 tariffs to 25 percent after March 1, CEO Matthew Shay told us Feb. 6. “I’m not sure we’re ready to go there yet,” Shay said of a court challenge.

The Consumer Technology Association, with which NRF teamed to oppose the tariffs, was shopping around a draft complaint in the fall with other trade groups (see 1809110012), seeking their legal and financial backing to support a court challenge if levies rose to 25 percent after Jan. 1. The administration postponed the increase for 90 days to give Chinese and U.S. negotiators a chance to hammer out a comprehensive trade agreement (see 1812140034). NRF hasn't discussed joining a court challenge with CTA, Shay told us.

NRF hasn’t “thought through every potential challenge” to the penalties, Shay said. “We’ve had many conversations with elected leaders” and members of the administration, and “they’re well aware of our concerns,” he said. “If you look at the pattern” by which some of the tariffs have “unfolded,” administration officials have gone “out of their way to try to avoid unnecessarily harming consumers,” with some “exceptions,” he said. “We think they understand the potential ramifications” of hiking the tariffs to 25 percent, he said.

For many reasons, NRF remains “hopeful we’ll see some real progress” in diffusing U.S-Chinese trade tensions, “as opposed to escalating or doubling down on something we think is not going to be productive for the economy,” Shay said. Savvy retailers know “the levers they can pull” working with their supply chains to weather any increased tariffs, he said. “They’ve had enough lead time to be thoughtful about this, regardless of the outcome.”

NRF believes “strongly we ought to be pushing forward with a practical solution that doesn’t include increased tariffs” or new rounds of duties on goods not currently taxed, Shay said. “We also believe that retailers are in a good place relative to the overall economy and consumer confidence to make decisions that are going to allow them to operate in an uncertain environment and address whatever headwinds they may face.”