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Retailers Urge U.S. to Cut Tariffs

Imports: Sellers of apparel and footwear say duties raise their costs, forcing them to charge consumers more.

April 03, 2002|BLAIR PETHEL | BLOOMBERG NEWS

WASHINGTON — Wal-Mart Stores Inc. and Target Corp. are among clothing retailers who say their customers pay an excessive share of the $18.6 billion the U.S. collects each year in import tariffs, and they want the government to change that.

The retailers say U.S. tariffs on imported apparel, footwear and other household items--which can be more than 10 times the average U.S. duty--raise their costs and hurt low-income consumers. That claim is backed by a new study.

Though U.S. duties on imports of steel and lumber are causing the most trade friction recently, the study by the Progressive Policy Institute concluded that almost half of all U.S. tariffs are collected on two categories of imports: shoes and clothing.

"If the president wants to give a real break to the American consumer, [eliminating the tariffs] is the best way to do real, meaningful tax reform," said Jonathan Gold of the International Mass Retail Assn., which represents companies including Best Buy Co. and Ames Department Stores Inc.

Gold's group is among those lobbying the U.S. government to press the issue at a new round of market-opening talks sponsored by the World Trade Organization, which are scheduled to conclude by 2005.

Big retailers that cater to the lower- and middle-income market import most of their goods, and the stores say the $8.7 billion in annual U.S. tariffs on shoes and clothing keep prices higher.

Tom Williams, a spokesman for Wal-Mart, said scrapping the tariffs would be preferable to reducing the taxes and would benefit consumers by helping the company cut prices.

The U.S. Harmonized Tariff Schedule, a 2,100-page document that spells out duties on imports, is intended to protect companies from low-cost foreign competition.

But since 1990, the U.S. has lost more than 700,000 textile jobs, and most of the U.S. footwear industry has moved production overseas.

Cass Johnson, director of international trade at the American Textile Manufacturers Institute, said the industry is suffering because U.S. barriers have declined while those abroad remain high.

The U.S. Trade Representative's office declined to comment.

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