CHINA'S ACTION SPARKS U.S. RELIEF

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As many U.S. marketers and retailers predicted, the Chinese government waited until after the Feb. 26 deadline to finally agree to crack down on its illegal pirate industries.

China avoided a U.S. threat of 100% tariffs on $1.1 billion in Chinese-made bicycles, running shoes, cellular phones, fishing rods and other goods, as well as carrying through with its threat to impose equally large tariffs on U.S.-made film, computer hardware, alcohol and cigarettes. The agreement relieved and cheered many U.S. businesses.

While U.S. Trade Representative Mickey Kantor carefully targeted products perceived as holding the least pain for U.S. business, nearly all retailers would have been affected, the National Retail Federation said, including Sears, Roebuck & Co.; Montgomery Ward & Co.; and Target Stores.

"There would have been some effect," said Rob Longendyke, Target's corporate public relations director. "We would have had to make a number of judgment calls on whether to carry particular products or to pay duties that were threatened, which would have come down to what we perceived as the consumer interest in these products."

The U.S. threatened tariffs on behalf of the intellectual property of several industries including sporting goods marketers.

Nike said it would have responded to tariffs on six of its Chinese-made models by moving manufacturing to Indonesia, South Korea, Taiwan or Thailand.

Avia Group International, a division of Reebok International, also said tariffs wouldn't have meant serious trouble.

"We felt the list was a good list, because it didn't impact us significantly," said Brian Mignano, Avia director-costing and logistics. "The tariffs didn't seem to impact the largest U.S. players because they multisource their shoes."

But the prevailing mood is one of uneasy relief among retailers and marketers.

"I'm glad to have it solved. I think that's great," said Charles Ferries, chairman of Schwinn Cycling & Fitness, though none of Schwinn's models would have been affected.

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