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Tariffs Plus Freight-Fee Fiasco ‘Wreaking Havoc on Supply Chains,’ AAFA Warns

Continuing to press the Biden administration for tariff relief, American Apparel & Footwear Association (AAFA) president and CEO Steve Lamar sent a letter to U.S. Trade Representative (USTR) Katherine Tai on Thursday requesting she reinstate exclusions from the Section 301 tariffs that are remnants of the Trump administration’s trade war against China.

Similar to the letter he wrote Biden on Monday, Lamar said these tariffs are directly threatening the survival of thousands of businesses in the midst of unprecedented shipping disruption.

Out of control freight rates and historic log jams at U.S. ports are creating delays and costs that are wreaking havoc on supply chains,” Lamar wrote. “Every American company, whether engaged directly in international trade or an indirect beneficiary of international trade, is impacted by the chaos and cost increases caused by the shipping crisis.”

AAFA is calling on USTR to use its authority to provide immediate and short-term relief by retroactively reinstating Section 301 exclusions that have expired and suspending the collection of Section 301 tariffs going forward. According to AAFA, the millions of dollars made available by these actions would help those companies that are hardest hit by the shipping crisis and alleviate the shortage in truck chassis, caused in part by the Section 301 tariffs imposed on imported chassis.

“The discombobulation is reverberating throughout the U.S. economy in a vicious cycle,” Lamar said. “Manufacturers are experiencing unacceptable delays along with sharp price increases for materials, equipment and labor…Importers and retailers are losing sales while experiencing unsustainable freight cost increases, resulting in decreased revenues, compressing margins and cost structures when funds are sorely needed to sustain U.S. workers’ pay during the ongoing pandemic.”

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After consulting with multiple supply chain stakeholders and the U.S. Department of Transportation, the ports of Long Beach and Los Angeles just announced new measures to improve freight movement and reduce delays as the facilities continue to experience record volumes.

The ports said these measures will enhance their landside operations to help meet the unprecedented growth in cargo volume. The twin ports will expand the hours during which trucks can pick up and return containers.

Mario Cordero, executive director of the Port of Long Beach, announced that Long Beach will take the first step towards a 24/7 supply chain by maximizing nighttime operations. Port of Los Angeles executive director Gene Seroka announced that the Port of Los Angeles will expand weekend operating gate hours.

As for the tariffs, Biden originally said he wanted to keep them in place as “leverage” against China. Domestic trade groups like the National Council of Textile Organizations contend the tariffs are justified to level the playing field against what they claim are China’s unfair trade practices.

Earlier this month, China’s finance ministry said it would extend tariff exemptions for 81 products imported from the United States by seven months. A report from Reuters noted that China has regularly made such extensions as part of an initial agreement to end the trade war between the world’s two biggest economies.

The items had received exemptions from retaliatory tariffs imposed by China on U.S. goods as countermeasures to U.S. Section 301 action, the ministry said. The exemptions include items including some shrimp and electric vehicle batteries, Reuters noted, but is not believed to include apparel and textile products.