Obama rebuffs outdoor industry tariff suspensions; footwear costs could soar

The Outdoor Industry Association harshly criticized President Barack Obama for the administration's unexpected position against the renewal of numerous temporary tariff suspensions that reduce costs for outdoor manufacturers and consumers. SNEWS explains the political maneuvering.
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It isn’t often that you hear the outdoor industry butting heads with a Democrat in the White House.

But on Monday, the Outdoor Industry Association harshly criticized President Barack Obama for the administration's position against the renewal of numerous temporary tariff suspensions that reduce costs for outdoor manufacturers and consumers.

OIA officials said the tariffs, scheduled to take effect Jan. 1, 2013, could increase industry production costs, particularly in footwear, by as much as 38 percent.

“This has potentially devastating consequences for outdoor manufacturers, suppliers and retailers,” OIA Director of Trade Policy Alex Boian said. “Many of these duty suspension bills have been in place since 2006 and ensure competitive retail prices for the outdoor specialty industry's best selling and most innovative new footwear products.”

At heart of the fight is the Miscellaneous Tariff Bill — something SNEWS told readers about back in June. The MTB is a large package of smaller tariff bills that Congress routinely passes to temporarily suspend or reduce import products that are not made in the United States.

OIA has utilized the MTB in the past to save outdoor companies and their customers more than $30 million, Boian said. The last MTB round reduced the nearly 40 percent footwear tariffs to zero, helping spur a reduction in costs and an explosion of new products and innovation in the sector, he told SNEWS.

In the big picture view, the Obama administration agrees with OIA that the tariffs should be suspended. The sticking point is that the administration is in the middle of trade negotiations with several Asian countries over another tariff suspension bill SNEWS noted in June — the Trans-Pacific Partnership, or TPP. In order to gain leverage in that bill, the administration doesn’t want to give up its bargaining tool of suspending certain tariffs.

“In effect, the administration is saying that it’s willing to hold the MTB hostage until a deal on the TPP can be reached,” Boian told SNEWS. OIA supports the TPP, but a deal there, and subsequent approval from the nations involved could take years, he said. The Obama administration argues that it’s favoring success with the longer-term TPP to reduce tariffs, rather than the short-term MTB. But OIA officials say they don’t see the MTB as an effective bargaining tool, and the risk to use it in such a manner results in several years of high tariffs for the industry.

As part of the MTB, a collection of more than 2,000 tariff bills, OIA has requested for the introduction of 28 bills — 20 new, and eight renewals — (click here to download the detailed list), mostly involving footwear, along with some sleeping bags, packs and travel bags. The Obama administration’s position is not to include those bills on the MTB.

Congress must still vote on the MTB, and could go against the Obama’s recommendation. OIA officials urged outdoor companies to quickly contact their members of Congress. Further information can be found at: outdoorindustry.org/IndustryAtRisk

--David Clucas

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