The Office of the US Trade Representative announced August 7th that the Administration will impose 25 percent tariffs on the second tranche of the 301 retaliation against China. This list covers $16 billion worth of Chinese imports and will go into effect on August 23. Click here to see the USTR press release.

ITC Analysis Finds Disappointing Results from the Dominican Republic Earned Import Allowance Program; OTEXA Sends Reminder that the Program Expires on December 1st

On August 7^th, the Commerce Department Office of Textiles and Apparel sent a reminder for the industry that the Dominican Republic Earned Import Allowance Program (known as the DR 2-for-1) will expire on December 1, 2018. The program was created for ten years as part of the CAFTA agreement. While the DR 2-for-1 program (or EIAP) provides duty – free entry for some apparel made in the Dominican Republic, the complicated program has never been widely used. To prove that point, the US International Trade Commission (USITC) just released the ninth review of the program. The main findings: Of the 13 registered firms, only 4 firms are currently using the program. In 2017, US imports of woven cotton bottoms from the Dominican Republic fell 57 percent by value (from $3.5 million in 2016 to $1.5 million) and 80 percent by quantity (from 745,000 SMEs in 2016 to 154,000 SMEs). Click here to read the USITC’s full report.

USTR Announces New GSP Eligibility Review of Turkey

On August 3rd, the Office of the United States Trade Representative announced the initiation of a special review of Turkey to participate in the Generalized System of Preferences (GSP) program. The U.S. action is based on the fact that Turkey has taken action to retaliate against the U.S. 232 tariffs on imports of Turkish steel and aluminum.  Deputy U.S. Trade Representative, Jeffrey Gerrish, said in a statement that he hopes “Turkey will work with us to address the concerns that led to this new review of their duty – free access to the United States.”

This week, President Trump directed the U.S. Trade Representative to consider increasing the tariffs on $200 billion Section 301 tariff list released on July 10th. USTR’s statement is available here. USTR is extending the comment period as a result. According to reports, Commerce Secretary Wilbur Ross said the 25 percent tariff will impact only impact .3 percent of the economy so it’s “not something that's going to be cataclysmic.”

The United States Fashion Industry Association (USFIA) will be testifying during USTR’s upcoming hearing, which will begin on August 20th. If you have any input for our testimony, please feel free to contact us; the initial draft of the testimony will be due August 9th, so we encourage you to get in touch this week or early next week.

Ivanka Trump Calls Tariffs “Temporary Pain,” Says NAFTA Renegotiation Will Benefit Workforce

This morning in Washington, DC, Axios held a conversation on workforce development featuring Ivanka Trump and Mark Weinberger, Global Chairman and CEO of USFIA member EY. USFIA attended this conversation. Of note, when asked about how workers are impacted by the trade war, Ivanka Trump called the tariffs “a temporary pain,” but workers will benefit over the long term as NAFTA and other trade deals are renegotiated. “At some point, you have to right the ship,” she said. “We aren’t looking to create uneven playing fields for other countries; we’re looking for fair and reciprocal trade deals.” Weinberger talked about how automation will change jobs and skillsets, and he called the tax bill a “major structural change” and “rethinking of the supply chain” that will change the amount of capital investment in the United States for good.

Late on Friday, China announced that it would impose retaliatory tariffs on approximately $60 billion in U.S. exports to the country, a response to President Trump’s announcement that he wanted to consider increasing tariffs from 10 percent to 25 percent. China’s tariffs would range from 5 percent to 25 percent on more than 5,000 products; lists are available in Chinese below. “The implementation date of the taxation measures will be subject to the actions of the US, and China reserves the right to continue to introduce other countermeasures,” said China’s Ministry of Commerce. “Any unilateral threat or blackmail will only lead to intensification of conflicts and damage to the interests of all parties.”

• Products subject to 25 percent tariff
• Products subject to 20 percent tariff
• Products subject to 10 percent tariff
• Products subject to 5 percent tariff

On July 30th, President Trump issued a proclamation suspending the application of African Growth and Opportunity Act (AGOA) duty-free treatment for all apparel products from Rwanda. In 2015, the East African Community (EAC) established a plan to ban imports of used clothing and footwear, to be phased in by 2019. The United States considers this a barrier to U.S. trade and investment, which is prohibited by the AGOA requirements. While Kenya, Tanzania, and Uganda worked with the United States to revise their policies, Rwanda has kept in place a policy that has raised tariffs on imports of used apparel and footwear by more than 1000 percent, according to the Office of the U.S. Trade Representative, effectively banning these imports.

“We regret this outcome and hope it is temporary,” said Deputy United States Trade Representative C.J. Mahoney in a statement. “But if the AGOA eligibility criteria are to have any meaning, they have to be enforced—particularly where, as here, other AGOA members took action in order remain in compliance. The President’s action today is measured and proportional. It suspends AGOA benefits for a class of imports that totaled $1.5 million in 2017, which accounts for approximately only 3% of Rwanda’s total exports to the United States.  Rwanda remains eligible to receive non-apparel benefits available under AGOA, and the President’s action does not affect the vast majority of Rwanda’s exports to the United States.  We look forward to working with Rwanda to resolve this issue so that benefits in the apparel sector may be restored.”

The White House proclamation is available here.

The USTR statement is available here.

Labor Proposes to Remove Uzbek Cotton from List of Products Produced by Child Labor

On July 31st, the U.S. Department of Labor announced that it is proposing to remove Uzbek cotton from the list of Products Produced by Forced or Indentured Child Labor. This list includes products by country of origin which Labor, in consultation and cooperation with the Departments of State and Homeland Security, has a reasonable basis to believe might have been mined, produced, or manufactured by forced or indentured child labor. The three departments have “preliminarily determined that the use of forced or indentured child labor in the production of that product has been significantly reduced,” according to the Federal Register notice. Comments should be submitted to the Office of Child Labor, Forced Labor, and Human Trafficking (OCFT) by August 30th according to the instructions in the Federal Register.

Levi Strauss & Co. Announces 2025 Climate Action Strategy

Today, USFIA Board Member Levi Strauss & Co. announced its 2025 Climate Action Strategy, the next step in the company’s longstanding commitment to sustainability. With this announcement, Levi Strauss & Co. is one of the first companies to establish aggressive targets for reducing its carbon footprint in its owned-and-operated facilities and across the entire global supply chain. Levi Strauss & Co. has committed to reducing greenhouse gas emissions by 90 percent and using 100 percent renewable energy in its owned-and-operated facilities, as well as reducing greenhouse gas emissions by 40 percent across the global supply chain. Click here to read more about Levi Strauss & Co.’s plan in FastCompany.