Is a “pink tax” at play in the price of products women commonly use?
That’s what a recently published BYU Law Review white paper argues when examining women’s products produced overseas.
Tariffs have a disproportionate impact on female shoppers, according to Utah law clerk Miranda Hatch’s research published last month. “When one thinks about the areas that still need improvement before our country is completely gender equitable, the first thing that one thinks of is likely not United States trade policy,” she wrote. “However, sexist trade practices have crept into our country’s policies, therefore making things more expensive for women.”
Men’s and women’s footwear and apparel are taxed differently under U.S. trade laws, with the higher burden falling on women, Hatch said. She pointed to a 2015 New York City Department of Consumer Affairs report comparing prices on gendered goods that found women pay an average of 8 percent more for apparel than men. “Gender-based tariffs have been shown to hurt women by lessening their spending power, thus exacerbating the gender wage gap,” Hatch wrote.
“This wide gap in cost, when it comes to apparel, can be traced back largely to the differential tariff rates,” the author added. The U.S. government’s tariff schedule, known as the Harmonized Tariff Schedule of the United States (HTSUS), lists the tariffs the country has levied on all foreign imports, including detailed descriptions of footwear and apparel products. Each tariff is characterized by its inputs and components, down to the rubbers, plastics, leathers and other materials used to make it.
“Even though these descriptions are already extremely specific, many goods are classified by gender as the last part of the subheading,” Hatch wrote. “Therefore, everything is materially the same in the goods aside from the gender of the ultimate user.” United States International Trade Commission (USITC) data from 2014 shows that 86 percent of U.S. apparel imports and 79 percent of footwear imports were classified by gender.
Fashion goods in general are subject to higher tariff rates than other categories, deepening the burden on female shoppers. Since the U.S. joined the World Trade Organization in 1995 and forged more free trade agreements, most tariff rates have fallen with the exception of products such as gendered footwear and apparel. “It has been found that almost all clothing and footwear is ‘dutiable’ while other goods are not,” Hatch wrote.
The average tariff rate on all imported goods hovers around 1.4 percent versus the average 11.6 percent for apparel tariffs. Though clothing makes up just 6 percent of imports, it accounts for nearly half of the U.S. government’s tariff income. “This commitment to keep apparel and footwear tariffs high has been exemplified in the recent trade war with China that has raised punitive tariffs on apparel to extremely high levels,” Hatch added.
The problem isn’t exactly a secret. Between 2007 and 2011, Steve Madden, PacSun, Ann Taylor, Century 21, Columbia Sportwear, Asics, Payless, Target, Tommy Hilfiger, Marshalls, TJ Maxx, Ecco and Quicksilver filed complaints with the U.S. Court of International Trade (CIT) alleging that tariffs on shoes and clothes were discriminatory on the basis of sex. Their claims that the increased taxes on these goods caused them to incur monetary damages were all eventually denied, save for two cases that were dismissed in court.
“Regarding legislation, there has not yet been a bill proposed to end gender-based tariffs specifically, and bills presented to end gendered price discrimination have not passed yet,” Hatch wrote. This, despite the Supreme Court classifying a law or policy as discriminatory “if it expressly classifies persons on the basis of race or gender.”
While federal and state legislatures have been slow to address the issue of discriminatory tariffs, movements have sprung up to eliminate the “pink tax,” or gender-based pricing. Activists have successfully argued that women pay more for goods such hygiene products than men, and last year, the Pink Tax Repeal Act was reintroduced in Congress to prohibit the sale of “substantially similar goods or services that are priced differently based on gender.”
Hatch said that because tax laws differ from one state to the next, pink taxes will likely be abolished at the state level. But for pink tariffs to change, the federal government will need to get on board. “Legislation to end price discrimination has been proposed, and it is likely that gender-based tariffs could be included in these proposals if more people become aware of their connection to price discrimination,” Hatch added.
“Regardless of how it is done, the public needs to be aware of the impact of gender differences in apparel tariffs,” she said. “These tariffs drive up consumer prices, which have a negative impact on women.”