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Almost all (99%) of the footwear Americans purchase is imported, so there is no longer a domestic shoe industry that needs special-interest protectionist trade legislation to compete more successfully with lower-cost foreign competitors. And yet remarkably, Americans are still paying protective
tariff tax rates of between 37.5% and 67.5% on imported footwear as a legacy of the Smoot-Hawley Tariff Act of 1930.
Blake Krueger, chairman of the Footwear Distributors & Retailers Association, explains in yesterday’s WSJ:
Smoot-Hawley set high tariffs on hundreds of products. In the decades since 1930, many of these rates have been reduced to more reasonable levels, or eliminated altogether. However, footwear tariffs have remained largely untouched. The thriving U.S. shoe-manufacturing sector of the 1930s is long gone, but what remains are protective tariff rates of 37.5%, 48% and some as high as 67.5%.
Pretty ridiculous that even without a domestic shoe industry engaged in lobbying and rent-seeking to retain their politically-enabled insulation against foreign competition, the
tariffs self-imposed taxes on millions of American consumers remains intact and unchallenged.
But maybe there’s now some hope, if our dysfunctional political leaders can exhibit a rare lapse of sanity and do the right thing:
In recent years there has been an effort in Congress to fix this. The Affordable Footwear Act, introduced in 2009 with bipartisan support, would remove the duties on approximately one-third of all footwear imports, focusing on the most egregious of duty rates—mass-produced items and children’s shoes. Removing import duties on the shoes bought every day will put needed money back into the hands of consumers.
MP: Maybe this is a good example of why we should have more legislation with an “expiration date” (sunset laws). It seems like this trade legislation would have died decades ago without a domestic industry to support its continuation.
HT: Fred Dent
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