EU May All but Eliminate Tariff Hike on Premium Women’s Jeans
According to Sandler & Travis Trade Advisory Services professionals in Europe, the European Commission has proposed to drop from 26% to 0.35% the additional tariff it imposed last year on premium U.S.-made women’s jeans. The change could take effect around May 1, if approved.
The tariff hike, which comes on top of the usual 12% duty, was authorized under a World Trade Organization grant of authority for retaliation against the United States’ continued distribution of antidumping duties collected on foreign-made goods to affected U.S. producers. The U.S. law prescribing that system (the Continued Dumping and Subsidy Offset Act, more familiarly known as the Byrd Amendment) was repealed years ago in response to an adverse WTO ruling, but duties collected previously are still being handed out as requisite legal or administrative procedures are concluded. When distributions spiked in 2012, so did the value of U.S. exports the EU could target, prompting Brussels to add women’s jeans to the retaliation list. The distribution amount for 2013, however, appears to have fallen by about half. In response, the EU reportedly plans to lower its additional tariffs on all affected goods rather than removing some of those products from the list.
Sandler, Travis & Rosenberg, P.A., has been actively working since the EU imposed the tariff hike to obtain relief for affected U.S. manufacturers. For example, the United Kingdom’s customs and tax department accepted a legal argument crafted by ST&R attorney Elise Shibles that certain jeans do not fall within the legal definition of denim with the Harmonized Tariff Schedule (and are thus not subject to the higher duties) because the dye used to make them is not colorfast. The other 27 EU member states appear to be accepting this ruling and the alternative classification of the subject jeans as women’s pants, which is only subject to the basic 12% tariff. Shibles has since been helping U.S. jeans makers that had been paying the higher 38% duty to secure refunds.