US trade bodies oppose tariff hike idea for garments from Bangladesh

Business Desk :
Four major American trade bodies have strongly opposed the suggestion aimed at 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 American Apparel and Footwear Association (AAFA), the National Retail Federation (NRF), the Retail Industry Leaders Association (RILA), and the United States Fashion Industry Association (USFIA), collectively made the observation in a letter to David Johanson, chair of the US International Trade Commission (USITC), on March 25.
The AAFA is the national trade association representing apparel, footwear and other sewn products companies and their suppliers and the NRF advocates for the people, brands, policies and ideas in the retail industry.
The RILA is the trade association for leading retailers while the USFIA represents textile and apparel brands, retailers, importers and wholesalers based in the US and doing business globally.
The four associations comprise hundreds of members, recording sales amounting to several trillion dollars annually.
The USITC is conducting an investigation — under the name of Apparel: Export Competitiveness of Certain Foreign Suppliers to the United States — into the sudden price hike and the supply glut of garment items to the US markets from five countries: Bangladesh, India, Indonesia, Cambodia, and Pakistan.
The joint letter comes two weeks after the commission held a hearing on the issue on March 11.
In the letter, the associations strongly disagreed with the move to raise the tariff rates on the imports of apparel items.
During the commission’s hearing attended by the leaders of the trade bodies, it was said that the US imposes higher most-favoured-nation duty rates on apparel products than nearly any other sector and factor into the cost competitiveness of source countries.
Bangladeshi apparel exporters are facing one of the highest tariffs at 15.62 percent in the US, which imported more than $116 billion worth of garment items last year. Bangladesh’s share stands at 9.3 percent.
Bangladesh, India, Indonesia, Cambodia, and Pakistan are, respectively, the third, fourth, fifth, sixth and the eighth largest apparel supplier to the US.
Bangladesh exports products such as denim, woven shirts, woven pants, t-shirts, active fleeces, and basic sweaters 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.
Tariffs are taxes that are paid by importers and eventually imposed on consumers. Current tariffs on apparel especially impact low- and middle-income consumers, who would be further harmed in the case of higher tariffs on clothing, the leaders told the hearing.
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, they said.
“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.”