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STR: E.U. May Drastically Reduce Tariff Hike on Women’s Premium Denim

After imposing an additional tariff on U.S.-made women’s premium jeans last year, the European Commission has proposed to reduce the tariff from 26 percent to just 0.35%, according to a Sandler, Travis & Rosenberg Trade report released today.

If approved, the change could take effect from May 1 this year.

The World Trade Organization (WTO) authorized the tariff hike–which comes in addition to the usual 12 percent duty–under a grant of authority in retaliation against U.S.’s antidumping duties collected on foreign-made goods to affected U.S. producers.

According to the ST&R report, “When distributions spiked in 2012, so did the value of U.S. exports the EU could target, prompting Brussels to add women’s jeans to the retaliation list. The distribution amount for 2013, however, appears to have fallen by about half. In response, the EU reportedly plans to lower its additional tariffs on all affected goods rather than removing some of those products from the list.”

Since the E.U. imposed the tariff hike, ST&R said it has been working to get relief for U.S. manufacturers. They crafted a legal argument claiming that certain jeans aren’t legally defined as denim with the Harmonized Tariff Schedule and are therefore not subject to the higher duties because the dye used to make them is not colorfast, and the United Kingdom’s customs and tax department accepted the argument. ST&R attorney Elise Shibles has since been helping U.S. jeans makers that had been paying the higher 38 percent duty to obtain refunds.