May 1, 2007
Irrational Tariffs Bring Law Suits
It makes absolute sense that men and women’s hiking boots imported from China would be taxed at the same rate. Of course, that’s not how the U.S. tariff system works and a number of companies including Asics, Columbia Sportswear and Steve Madden have filed lawsuits against the federal government challenging the system in place.
According to a report by The New York Times, the government places higher import tariffs on like items intended for women and men. For example, an imported men’s bathing suit has a 28 percent tax placed on it while a woman’s bathing suit is assessed a fee of 12 percent.
Columbia Sportswear imports its Diamond Peak hiking boot from China and while the men’s and women’s versions are said to be virtually the same, the tariff on the women’s shoe is 10 percent compared to 8.5 percent for the men’s model.
In one imported product after another, men’s and women’s items are taxed at different rates with no clear rationale to explain the discrepancy.
Peter Bragdon, the general counsel at Columbia Sportswear, called the practice “irrational.”
Most companies in the apparel industry agree with Mr. Bragdon, but have taken the stance that this is the price of doing business.
“You grin and bear it,” Alan Geller, president of Teri Jon Apparel, told the Times.
Now, others have taken the position that they no longer wish to deal with the difference in tariff rates based on gender and have taken their case to the courts. Of course, as the Times article pointed out, it may turn out (perhaps even likely that it will) that the federal government simply raises the lower tariff fee to meet the higher percentage. Still, the companies fighting the status quo believe that it is fight worth waging.
Discussion Questions: Is there any logic to support higher tariffs on certain products because they are designed and manufactured for a particular gender? What is likely to happen should the companies suing the federal government win? What will it mean for the manufacturers, retailers and consumers of these clothing items?
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“Not for the first time, I have to wonder what sort of minds tick away in the little tax office cubicles where people sit dreaming up the rules and regulations.”
Once again, I think we have to follow the advice of the screenwriter in All the President’s Men: Follow the money.
Based on our much more recently revealed experience of the 109th Congress, my guess is that these rules, too, don’t get written in tax cubicles but in lobbyists’ offices, then slipped into thousand-page omnibus bills in conference committees in the dead of night.
When the reconciled bill gets passed on a voice vote the next morning, nobody knows what little loophole got slipped in the night before. But when the tax bill cometh, there it is.
What’s really odd about the gender-based tariff lawsuits: what took so long? Why didn’t they sue long ago?
If such a ridiculous policy remains, what stops distributors/merchandisers from playing with perception? There’s nothing stopping a retailer from selling a “man’s” shoe to a woman, is there? A whole new category: “Men’s” stilettos.
I’m looking forward to comments received later today in the (probably vain) hope that someone can come up with a logical explanation for what seems, on the surface, to be totally illogical behaviour. Not for the first time, I have to wonder what sort of minds tick away in the little tax office cubicles where people sit dreaming up the rules and regulations.
I would certainly be interested in knowing the rationale behind the mysterious tariff system. My prognosis is that there likely no common theme across the pattern of tariff bias that occurs across various product categories. Even less likely was it willful discrimination. The Fed explanation would likely be an economic one. Either, protectionism that may have existed for particular groups of products, at different times, or trade benefit reciprocity for trade partner countries. Again, this is just conjecture, and it would be very interesting to know what comes out in court.
If all the irrational laws in the world were stricken from the books, law libraries would be able to put in coffee bars in all the extra space. That said, I don’t think this is a case of gender discrimination, since the tariffs appear to to differentiate but not discriminate based on gender. More likely it is the cumulative result of specific protective tariffs designed to help a local manufacturer or industry, or based on some long-forgotten buying pattern that prevailed at the time.
Perhaps the best outcome of rationalizing the system would be efficiency, if not fairness.
The rates of customs duties (i.e., import taxes) at issue are “bound” under the World Trade Organization agreement, which means that Congress cannot raise those rates without violating our WTO obligations and thereby creating reciprocal rights for our trading partners to increase their own duty rates. If raising duty rates was a simple and easy solution to this predicament, the case never would have been filed.
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“Not for the first time, I have to wonder what sort of minds tick away in the little tax office cubicles where people sit dreaming up the rules and regulations.”
Once again, I think we have to follow the advice of the screenwriter in All the President’s Men: Follow the money.
Based on our much more recently revealed experience of the 109th Congress, my guess is that these rules, too, don’t get written in tax cubicles but in lobbyists’ offices, then slipped into thousand-page omnibus bills in conference committees in the dead of night.
When the reconciled bill gets passed on a voice vote the next morning, nobody knows what little loophole got slipped in the night before. But when the tax bill cometh, there it is.
What’s really odd about the gender-based tariff lawsuits: what took so long? Why didn’t they sue long ago?
If such a ridiculous policy remains, what stops distributors/merchandisers from playing with perception? There’s nothing stopping a retailer from selling a “man’s” shoe to a woman, is there? A whole new category: “Men’s” stilettos.
I’m looking forward to comments received later today in the (probably vain) hope that someone can come up with a logical explanation for what seems, on the surface, to be totally illogical behaviour. Not for the first time, I have to wonder what sort of minds tick away in the little tax office cubicles where people sit dreaming up the rules and regulations.
I would certainly be interested in knowing the rationale behind the mysterious tariff system. My prognosis is that there likely no common theme across the pattern of tariff bias that occurs across various product categories. Even less likely was it willful discrimination. The Fed explanation would likely be an economic one. Either, protectionism that may have existed for particular groups of products, at different times, or trade benefit reciprocity for trade partner countries. Again, this is just conjecture, and it would be very interesting to know what comes out in court.
If all the irrational laws in the world were stricken from the books, law libraries would be able to put in coffee bars in all the extra space. That said, I don’t think this is a case of gender discrimination, since the tariffs appear to to differentiate but not discriminate based on gender. More likely it is the cumulative result of specific protective tariffs designed to help a local manufacturer or industry, or based on some long-forgotten buying pattern that prevailed at the time.
Perhaps the best outcome of rationalizing the system would be efficiency, if not fairness.
The rates of customs duties (i.e., import taxes) at issue are “bound” under the World Trade Organization agreement, which means that Congress cannot raise those rates without violating our WTO obligations and thereby creating reciprocal rights for our trading partners to increase their own duty rates. If raising duty rates was a simple and easy solution to this predicament, the case never would have been filed.