The group of senators and House lawmakers sent a letter to Chairman Max Baucus (D-Mont.) and ranking Republican Charles Grassley (R-Iowa) urging them to include the footwear bill, which would eliminate duties on certain types of lower-priced and children’s footwear, in the jobs bill.
They asserted that some international manufacturers are circumventing the U.S. tariff system and paying lower duties on some types of imported footwear than their American counterparts by using textiles in the soles of shoes to get a textile tariff classification, which is subject to lower duties.
The lawmakers said the European Union has blocked attempts by foreign footwear manufacturers at “tariff engineering” but U.S. Customs and Border Protection has “thus far failed to take similar action.”
“In the midst of the highest unemployment rate in a quarter-century, we cannot afford to lose existing jobs in our states to unfair tariff practices,” they said in the letter. “If we fail to act in a timely manner, the facilities that produce these jobs will face imminent closure.”
The lawmakers singled out two footwear companies that still have production in the U.S. and which are put at a competitive disadvantage, including Genfoot Inc., based in Littleton, N.H., which employs 150 workers, and New Balance, which has three factories in Maine, and employs 1,000 workers. The company’s design and manufacturing headquarters in Massachusetts employs 1,200 people.
A provision in the Affordable Footwear Act would close the loophole that “allows importers to evade duties that help the domestic manufacturers compete in the U.S. and global markets,” they said.
The bill states that textile materials inserted into soles does not change the character or classification of the soles or the shoes, and thus, is subject to the higher duties.
The centerpiece of the duty-dropping footwear bill, which the industry has been pushing for a few years, would eliminate some $800 million in tariffs on approximately$1.7 billion collected each year. It would also eliminate tariffs on about 60 percent of shoes imported into the U.S., or nearly 1.5 million pairs annually, according to industry figures.