Fate of Section 301 Tariffs on Apparel Discussed at USFIA
NEW YORK -- Most apparel was spared from Section 301 tariffs until September, when a large swath of imports was hit with 15 percent additional tariffs, though a few categories were on List 3, and are facing an additional 25 percent. Between the two rounds, 77 percent of apparel is subject to 301 tariffs. The Office of the U.S. Trade Representative is now tasked with considering exclusion requests for List 3, and Assistant USTR for Textiles Bill Jackson said that volume is “astounding" -- about 30,000 requests. Only 600 of those are in tariff code chapters 50 to 60, he said, and fewer than 20 have been granted approval so far.
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"Many of the requests are even beyond the 10-digit level" of specificity, Jackson said, but that's fine, as long as CBP can administer the entry of that specific product.
But what will happen with the remaining 23 percent of apparel, currently scheduled to face an additional 15 percent tariff on Dec. 15? President Donald Trump is "very reluctant to impose tariffs on [List] 4b," said David Spooner, United States Fashion Industry Association general counsel. He said it's no coincidence that apparel, toys and personal electronics were put off until the end. Spooner and Jackson were speaking at the USFIA Trade & Transportation Conference Nov. 7.
With the caveat that the president is unpredictable, Spooner said after a meeting at the White House, he's "fairly confident List 4b would be postponed again in December."
But in considering the chances of exclusions for apparel importers, Spooner was gloomier. He said his law firm, Barnes and Thornburg, recently represented a client that imports standing desks. Two exclusion requests for standing desks were submitted to USTR, with just enough variance in the product descriptions that the USTR considered them two different goods. The standing desk imported by the small company will be spared a 25 percent tariff; the large company's standing desk will not. "That worries me with respect to our sector," he said. Although a large company cannot show that the additional cost for any one product is a major burden on operations, when you add the dozens of products subject to tariffs together, the bite is substantial, he said. Unlike in the steel and aluminum tariffs, a Section 301 exclusion covers all importers of a product.