A bipartisan group of 27 legislators sent a letter Tuesday to Ron Kirk, the US Trade Representative in charge of negotiating the Trans Pacific Partnership (TPP), urging him to create “21st century” import guidelines and duties for footwear. Specifically, they echoed the concerns of the Retail Industry Leaders Association (RILA), calling for swift reductions in footwear tariffs.
“Footwear tariffs are among the highest in the U.S. tariff schedule despite that less than 1% of footwear sold in the in U.S. is produced here, and the footwear that is produced here is largely manufactured with imported components that are duty-free or subject to very low duties,” the letter said.
The TPP will include the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam. Vietnam produces about 8% of US footwear. Notably absent is China. The original objective of the agreement was to eliminate all tariffs between member countries by 2015, but the inclusion of additional negotiating countries has pushed the timeline out.
The lawmakers said, “For those U.S. footwear companies sourcing athletic footwear in Vietnam, the vast majority of innovation, design and marketing–and therefore the bulk of the value of that footwear–is accomplished in the U.S., providing thousands of good-paying American jobs.”
Lower tariffs will increase margins for producers and US firms, and also translate into lower costs for US consumers. Increased volume will create greater economic growth, particularly in regions with a strong presence of footwear companies.
The move by the lawmakers was applauded by RILA, an industry association composed of over 200 retailers, manufacturers, and service suppliers. The association accounts for over $1.5 trillion in annual sales, though the majority of those are not related to footwear.