Fashion Intel & Analysis
This week, the United States Fashion Industry Association (USFIA) filed comments to the United States Trade Representative (USTR) opposing retaliatory tariffs of up to 100 percent on products of France, including handbags and tableware, over France’s Digital Services Tax.
The comments explain that the U.S.-EU trade relationship is important to retail operations and for sourcing and that tariffs will only harm American fashion brands and retailers, as well as consumers. “Retailers and brands are concerned about the future expansion of digital tax regimes and we strongly support an international solution that will restrict the ability of individual countries to impose new restrictions. However, we believe that a solution to the tax policy issues is the best strategy, and one that likely would be more successful than relying on the retaliation through higher penalty tariffs that will have an obvious negative impact on the US fashion industry.” The full comments are available here.
Now that the window has closed to submit Miscellaneous Tariff Bill (MTB) petitions, USFIA wants to provide an update on the final petitions submitted and outline the next steps in the process. The United States International Trade Commission (USITC) received more than 4,000 petitions seeking temporary duty suspensions or reductions. Below is a table that highlights the petitions filed that are important to fashion brands and retailers, breaking out the HTS chapters separately.
The next steps in the MTB process is the public comment phase, during which interested parties and the public can review all posted petitions and file comments for the Commission consideration. The public comment period will open on January 10, 2020 and close on February 24, 2020. The USITC will be hosting a webinar on Thursday, January 9 to discuss the next steps in the process and how to file comments through the MTBPS portal. You can register for the webinar here.
|All HTS Codes||4,087||3,537||550|
|Chapter 42 (Articles of leather; travel goods; and handbags)||72||58||14|
|Chapters 50 - 63 (Textiles and Textile Articles)||401||80||321|
|Chapter 64 (Footwear; gaiters and the like; parts of such articles)||219||206||13|
|Chapter 65 (Headgear and parts thereof)||8||8||0|
On New Year's Eve the White House released a statement summarizing the results of President Trump’s first three years in office. We want to share with you the section on “Fighting for Fairer Trade” which highlights some of the major trade policy actions by the Administration.
FIGHTING FOR FAIRER TRADE: President Trump is negotiating better trade deals for the American people after years of our country being taken advantage of.
- President Trump negotiated the U.S.-Mexico-Canada agreement (USMCA) to replace the outdated North American Free Trade Agreement (NAFTA).
- USMCA includes tremendous wins for American workers, farmers, and manufacturers, generating over $68 billion in economic activity and creating 176,000 new jobs.
- President Trump negotiated two tremendous deals with Japan to boost America’s agricultural and digital trade with the world’s third largest economy.
- Thanks to President Trump’s efforts, Japan will open its market to approximately $7 billion in American agricultural exports.
- The President’s negotiations will boost the already approximately $40 billion worth of digital trade between our two countries.
- President Trump fulfilled his promise to renegotiate the United States-Korea Free Trade Agreement, providing a boost to American auto exports.
- These efforts doubled the number of American autos that can be exported to South Korea using United States safety standards.
- President Trump reached a historic phase one trade agreement with China that will begin rebalancing our two countries’ trade relationship.
- As a result of President Trump’s leadership, China has agreed to structural reforms in areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.
- China will be making substantial purchases of American agricultural products, marking a monumental win for American farmers.
- President Trump fulfilled his promise to withdraw from the disastrous Trans-Pacific Partnership (TPP).
- President Trump achieved a mutual agreement with the European Union to work together towards zero tariffs, non-tariff barriers, and subsidies on certain goods.
- President Trump has worked to prepare for post-Brexit trade and made Congress aware of his intent to negotiate a free trade agreement with the United Kingdom (UK).
- President Trump imposed tariffs on foreign steel and aluminum to protect our vital industries and support our national security.
- President Trump imposed tariffs to protect American-made washing machines and solar products that were hurt by import surges.
- The United States scored an historic victory by overhauling the Universal Postal Union (UPU), whose outdated policies were undermining American interests and workers.
- President Trump has expanded markets for American farmers to export their goods worldwide, for example:
- The European Union has opened up to more American beef and increased imports of American soybeans.
- China lifted its ban on American poultry and opened up to American beef.
- South Korea lifted its ban on American poultry and eggs and agreed to provide market access for the greatest, guaranteed volume of American rice.
- The Trump Administration has authorized a total of $28 billion in aid for farmers who have been subjected to unfair trade practices.
In a draft Federal Register notice that was posted on their website on December 31st, the Office of the United States Trade Representative has released additional Tranche 3 Product Exclusions. The Product Exclusions will be retroactive to the September 24, 2018 effective date of the $200 billion action, and will remain in effect until August 7, 2020. This round of product exclusions includes a number of products of interest for USFIA members. Following are the HTS numbers for the fabrics, briefcases and flatware covered by this announcement.
- 4202.11.0030 Briefcases with outer surface of leather, each measuring no more than 37 cm by 45 cm by 17 cm
- 5407.52.2060 Woven fabric of synthetic filament yarn containing 85 percent or more by weight of textured polyester filaments, dyed, measuring 249 cm in width, weighing more than 170 g/m2
- 5407.61.9930 Woven dupioni fabric wholly of non-textured dyed polyester filaments, weighing not more than 170 g/m2 , measuring not more than 310 cm in width
- 5407.61.9930 Woven fabric wholly of polyester, dyed, not flat, containing non-textured polyester filaments, weighing not more than 170 g/m2 , measuring not over 310 cm in width
- 5407.61.9935 Woven fabric wholly of polyester, dyed, containing non-textured polyester filaments, weighing more than 170 g/m2 , measuring not over 310 cm in width
- 5407.72.0015 Woven fabric containing by weight 47 percent of nylon and 53 percent of polyester, dyed, containing textured filaments, weighing not more than 170 g/m2 , measuring greater than 274 cm in width
- 5512.19.0090 Woven dyed fabrics wholly of spun polyester, weighing more than 240 g/m2 and measuring not more than 310 cm in width
- 5514.22.0020 Woven dyed 3-thread twill fabrics containing by weight 65 percent of polyester and 35 percent of cotton staple fibers, not napped, weighing more than 200 g/m² and exceeding 310 cm in width
- 5810.92.9080 Woven dyed embroidery fabrics containing by weight 55 percent of polyester and 45 percent of nylon, weighing less than 115 g/m2 and measuring 289 cm in width
- 8215.20.0000 Sets of flatware of stainless steel, containing no article plated with precious metal, put up for retail sale
This morning President Trump tweeted that he will sign “our very large and comprehensive Phase One trade deal with China on January 15." The tweet says that later this year Trump will travel to Beijing to begin talks on Phase Two of the trade deal.
As part of the Phase One deal, the United States cancelled tariffs set to go into effect on December,15th and will also cut the tariff rate in half on roughly $120 billion of goods affected on Sept. 1st of this year. In exchange, China agreed to increase U.S. agricultural purchases by $32 billion over the next two years. What is missing from today's news is the timing for the reduction of the Tranche 4A tariffs to 7.5%. Since USTR has not yet published that notice, we can assume that it will go into effect no later than January 15th. Read more from the Wall Street Journal here.