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Virtually all the footwear that Americans buy is imported, and those shoes are taxed at an average rate of 10 percent—eight times higher than the average for all imports. This “policy” is a relic of an earlier age that poses an unjustified burden for poor American consumers, who spend a higher share of their incomes on highly taxed shoe and clothing imports than do richer Americans. This outdated policy also imposes an unnecessary burden on producers in developing countries that are the major suppliers of inexpensive footwear.

Congress proposes making a minor dent in this absurd situation by temporarily lowering tariffs on certain footwear, but it is facing opposition from the US Trade Representatives’ office. Why? Because USTR wants to hoard its bargaining chips in the negotiations with Vietnam, a major footwear exporter, as part of the Trans-Pacific Partnership negotiations.  Even what remains of the American footwear industry is OK with the proposed “miscellaneous tariff bills” (subscription required) because they would only affect tariffs on 17 products accounting for less than 1 percent of all US footwear tariff categories.

Come on USTR, time to get in the holiday spirit.

 

CGD blog posts reflect the views of the authors drawing on prior research and experience in their areas of expertise. CGD does not take institutional positions.

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