And the apparel industry may get caught in the middle unless individual companies act now.
The U.S. government is considering tariffs on 85 European imports in retaliation for what it calls unfair trade practices against American beef. On the list of products are viscose rayon staple fiber (HTS 55041000) and single yarn (excluding sewing thread) that contains 85 percent or more by weight of artificial staple fibers (HTS 55101100).
The issue dates back to 1998 when the EU lost a case at the World Trade Organization for banning American beef. Then in 2009, the U.S. negotiated an agreement to allow some market access for beef that meets the EU’s standards, but the agreement hasn’t been honored. Rather than wait for the Transatlantic-Trade And Investment Partnership to be completed, under which this situation would likely be resolved, the United States Trade Representative is taking action now via tariffs.
The apparel industry has serious concerns, however, about the negative impact these tariffs could have. The first is that there’s no correlation between food and beef so creating a hardship for apparel is incongruous. Next, a steep increase in inputs would make the resulting products uncompetitive, putting jobs and the U.S. supply chain at stake. Finally, there’s no easy alternative if companies were unable to afford the costly EU viscose rayon given that there is no production in the Americas.
In an effort to help determine which products to include in the proposed tariffs, the USTR is requesting comments from companies that could be negatively impacted. The deadline for comment is Monday, January 30th on the Regulations.gov website. In the communications, companies are urged to outline how the proposed tariffs would negatively impact their businesses and the market at large. The more firms that comment, the louder the industry voice will be on this issue.