Apparel Importers Should Avoid Pitfalls on Hangers Subject to Section 301 Duties, Law Firm Says
Apparel importers may still want to classify their hangers separately from apparel, but should take extra care in light of the potential application of Section 301 tariffs on the hangers, Sandler Travis said in a client alert. CBP has long held that some more substantial, reusable hangers are classifiable in subheading 3923.90.0080 as plastic articles for the conveyance or packing of goods, even when imported together with apparel. That subheading carries a 3% duty rate, though 10% Section 301 tariffs raise that to 13% if imported from China, and that could rise to 28% of no deal is reached on the tariffs by March 2 (see 1812140034). Nonetheless, importers should still perform an analysis on whether that rate would still be lower than the rate applicable to the garment itself if the hangers are less substantial and considered “packing material” not classified separately from the apparel, the alert said.
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If they decide to classify them separately, importers should not assume they have the same origin as the garments, and should implement a program to trace and document the hangers’ origin, in light of the risk of increased CBP scrutiny to ensure any applicable Section 301 tariff is being paid, Sandler Travis said. Likewise, importers should not simply change their classification practice without changing the hangers themselves. For example, if an importer decides the Section 301 tariffs mean it should begin classifying the hangers with the garments, it should also change to a less substantial type of hanger, Sandler Travis said.