FDRA has been advocating on behalf of the footwear industry for over 70 years. Headquartered between the White House and the Capitol in Washington, DC, FDRA is THE voice of the footwear industry and constantly pushes for both the full elimination of ALL footwear duties, and for the free flow of footwear worldwide.
With 99% of all footwear sold in the U.S. imported, footwear tariffs, put in place in the 1930s, no longer protect American jobs but are actually harming the footwear industry from expanding job creation in the fields of design, marketing, distribution, and retail. In 2015, the footwear industry paid $2,898,447,370 in footwear tariffs to the U.S. government. This is an 8% increase over 2014 is far higher than the U.S. footwear industry’s 2014 U.S. sales growth as a percent.
Footwear tariffs are also some of the highest on any consumer good, averaging 10% but reaching upwards of 48% and 67% on certain footwear types. Footwear tariffs are also regressive, resulting in lower cost children’s footwear facing higher tariffs (around 38% on average) than men’s leather dress loafers (8.5%). Tariffs directly increase the cost of footwear at retail, hitting hard working families the hardest at a time when most are facing increasing economic hardships.
Don’t just take our word for it, below is the response from leading footwear executives on the negative impact of footwear tariffs:
“These tariffs are job killers, reducing our revenues and impacting our ability to expand economic opportunity. Worse, they raise prices on consumers and make us less competitive against other companies and brands around the world.” – Greg Tunney, President and CEO of RG Barry Brands
“We constantly strive to design and build the very best products, all the while working to provide our consumers the best value. These tariffs amount to a hidden tax. If we can get these duties removed through TPP we can ultimately provide an even better value to our consumers, and at the same time create more jobs across the country…” -Blake W. Krueger, Chairman, CEO & President of Wolverine Worldwide
“We are a proud domestic manufacturer of footwear, employing more than 130 workers at our Danner factory in Portland, Oregon. Passing TPA and TPP removes outdated tariffs and helps fuel demand for USA-made boots among partner countries. In addition, we save on the footwear lines we produce in Vietnam, which allows us to reinvest the duty-free savings back into our American factory and American workers…” – Quinn O’Rourke, Director of Compliance and Logistics at LaCrosse Footwear, Inc.
FDRA’s Legislative Initiatives
To accomplish its mission of eliminating these outdated tariffs, the FDRA team meets constantly with U.S. and International officials, U.S. Members of Congress, and U.S. Senators to tell the industry’s story and propel trade policy on footwear forward into the 21st Century. FDRA staff have over 20 years of combined work experience serving in Congress and use their expertise to push for a number of legislative initiatives to end tariffs on footwear – initiatives focused on lowering consumer costs and creating American jobs. FDRA also hired a former member of Congress to assist with strategic thought on how the industry can better leverage its strength on Capitol Hill.
TPP (Trans-Pacific Partnership)
FDRA strongly supports the efforts of the Obama Administration to negotiate a permanent free trade agreement with Australia, New Zealand, Brunei, Malaysia, Singapore, Vietnam, Chile, Peru, Canada and Mexico through the Trans-Pacific Partnership (TPP). FDRA’s President has participated in these talks and will continue to provide input to the key negotiators. With Vietnam being the steadily growing number two supplier of footwear to the U.S. market, TPP will become the most commercially significant free trade agreement for footwear to date.
TPP could save the industry and consumers almost half a billion dollars in import taxes each year – money that can be reinvested back into jobs, product development, and savings for consumers. A handful of companies are pushing to maintain high duties on footwear within the Agreement – FDRA strongly opposes this approach. FDRA believes that delivering value to American consumers and growing innovative jobs in the footwear industry should be the U.S. Government’s top priority in the negotiations. Over 300,000 American footwear jobs should not be held hostage by a select few.
AFA (Affordable Footwear Act)
The Affordable Footwear Act (AFA) is a bill in Congress that would temporarily eliminate approximately 35% of the $2.69 billion in taxes paid on footwear imports every year. Using retail industry analysis, it is estimated that the AFA would save American consumers upwards of $2.5 billion annually at retail outlets across the country. Just as an example, after the passage of the AFA, a $10 pair of children’s canvas sneakers would drop by $3!
MTB (Miscellaneous Tariff Bill)
The Miscellaneous Tariff Bill (MTB) is a tool Congress uses to temporarily lower taxes on imported resources and materials used in manufacturing as well as goods American consumers purchase everyday. Since 2006, footwear has been one of hundreds of products covered by this important legislation – saving footwear companies and consumers millions of dollars each year. Every two or three years the bill needs to be renewed to ensure the continuation of savings, while also providing an opportunity to insert additional new products not previously covered by the last MTB.
Since 2006, FDRA has been the leader in ensuring that footwear is covered by this legislation so that its members and all Americans receive cost reductions. Today, more than 15 types of footwear have received tax-free or reduced import taxes for the industry. Unfortunately, the most recent MTB expired on January 1, 2013. FDRA and its allies are working to ensure that a new bill is passed as soon as possible because this impacts consumer costs and industry jobs. In addition, FDRA is diligently advocating to ensure that the new bill is retroactive to January 1, 2013, allowing footwear importers to apply for a duty refund from Customs and Border Protection (CBP) for all footwear entering into the United States between January 1, 2013 and the implementation date of the new MTB.
GSP (Generalized System of Preferences)
For many years the United States has extended the Generalized System of Preferences (GSP) program to many poor and developing nations. This program allows for certain goods to be brought into the U.S.duty-free. The GSP Program has allowed many countries, including Brazil, India, Indonesia, Cambodia, Bangladesh, and others, the opportunity to ship their products tax free to the world’s largest consuming market.
Since the program started, footwear has been excluded from GSP coverage even though many of the GSP beneficiaries produce footwear. In 2013, FDRA began seeking to include footwear, in a limited capacity, on the list of products that receive GSP treatment. If passed, this would mean the potential to save the industry over $100 million in import taxes every single year. Since any changes to the program are made by the U.S. Congress, FDRA has been actively asking Members and Senators to include footwear in the GSP, with the hope our efforts will pay off when the full program is extended.
AGOA (African Growth and Opportunity Act)
With a small but increasing number of footwear being produced in Ethiopia, the African Growth and Opportunity Act (AGOA) has become and important trade tool for the footwear industry. AGOA allows footwear made in specific African countries to be imported without duties, reducing costs for American companies and consumers and helping build African economies. FDRA has held dozens of meetings, and sent letters, to U.S. officials across Washington to push for the renewal of AGOA.