Congress has yet to pass the Miscellaneous Tariff Bill (MTB), which expired at the end of the year and reduced import tariff rates on thousands of products, including shoes.
The result is that tariffs on some footwear are now as high as 37.5 percent. In all, 15 existing tariff bills were up for extension, eight of which directly impact the outdoor industry — specifically waterproof footwear, among other constructions.
Footwear lobbyists said the bill has bipartisan support so passage is all but guaranteed, but when exactly it will be passed is unknown. The last time the MTB was allowed to expire was in 2009. It eventually was renewed with retroactive effect, but wasn’t passed until August 2010.
“The MTB got caught up in the fiscal cliff negotiations, but we went over the tariff cliff,” said Nate Herman, VP of international trade at the American Apparel & Footwear Association.
Alex Boian, senior director of government affairs at the Outdoor Industry Association, said for the time being, vendors and retailers are absorbing the cost increase, banking on the fact that the bill will be enacted retroactively.
Still, the bill’s retroactivity is not a certainty, he added. “I encourage our members to plan conservatively and plan on paying these duties during the first half of the year [until the bill is passed] — and don’t plan on it being retroactive,” Boian said.
Herman noted that while the bill has broad support, a number of pressing issues in Congress are likely to take precedence, making the bill’s passage unlikely prior to summer.
“[Coming up in February and March, we have] the next fiscal cliff, [plus] the government only has appropriations through the end of March, and we have the debt ceiling,” he said. “So we’re in a situation where it’s going to be very hard to get the space to discuss the MTB for the first quarter of 2013.”
Matt Priest, president of the Footwear Distributors & Retailers of America, said he had hopes to add an additional 37 bills to the MTB to reduce import tariffs. However, these new bills don’t have the support of the Obama administration and are seen as an obstacle to talks regarding the Trans-Pacific Partnership.
Still, given the numerous products and industries involved in the bills’ passage, Priest said he is confident the 15 bills up for renewal will pass. “It’s a popular bill,” he said. “It impacts every congressional district. It’s pretty close to a sure thing.”