American trade bodies against increasing tariff on apparels from Bangladesh

Four American trade bodies have strongly opposed the idea of imposing higher tariffs on apparel items imported from Bangladesh and four other countries since it is the end-consumers who bear the additional prices ultimately.

The four trade bodies – the American Apparel and Footwear Association, the National Retail Federation, the Retail Industry Leaders Association, and the United States Fashion Industry Association – made the statement in a letter to David Johanson, chair of the US International Trade Commission, on 25 March.

The American Apparel and Footwear Association is the national trade association representing apparel, footwear and other sewn product companies and their suppliers and the American Apparel and Footwear Association advocates for the people, brands, policies and ideas in the retail industry.

The Retail Industry Leaders Association is the trade association for leading retailers while the United States Fashion Industry Association represents textile and apparel brands, retailers, importers and wholesalers based in the US and doing business globally.

In the letter, the associations strongly disagreed with the move to raise the tariff rates on the imports of apparel items.

The US imposes higher most-favoured-nation duty rates on apparel products than nearly any other sector and factors into the cost competitiveness of source countries, reads the letter.

Bangladesh exports products such as denim, woven shirts, woven pants, T-shirts, active fleeces, and basic sweaters to the US. Bangladesh exported 9.3% of the total apparel imports by the US.

However, the US has imposed a whopping 15.62% tariff on apparel imports from Bangladesh.

Bangladesh, India, Indonesia, Cambodia, and Pakistan are, respectively, the third, fourth, fifth, sixth and the eighth largest apparel suppliers to the US.

Despite ineligibility for duty-free treatment under the generalised system of preferences (GSP), which excludes apparel products, the five countries remain competitive.

"In part, this reflects the important role these countries play for apparel brands and retailers' broader supply chain diversification efforts," the letter said.

"While some have suggested that the US should impose higher tariffs on apparel products from these and other countries, we strongly disagree."

The leaders also said they experienced through the imposition of tariffs on products from China, tariffs increase costs for US businesses and American consumers, not for foreign exporters.

If the administration is serious about its desire for US companies to reduce dependencies on any single country, imposing tariffs on other source countries would be counterproductive, said the leaders.

"Instead, we encourage the US government to take additional steps to help further accelerate the ongoing supply chain diversification efforts. This includes immediate retroactive renewal of the GSP programme, as well as expanding GSP to include certain apparel products," the letter read.

In the case of Bangladesh, India, Indonesia, Cambodia, and Pakistan, the members report that these countries have well-established textile industries, characterised by highly skilled labour forces and advanced sewing capabilities, the letter said.

"India and Pakistan are also vertically integrated. And increasingly, members report that apparel products sourced from Bangladesh, Cambodia, India, Indonesia, and Pakistan contain inputs also sourced from within these countries."