A new resolution in the U.S. House of Representatives would protect China from the risk of shoe and clothing manufacturers relocating to other countries that are more friendly to the United States.
H.Res. 1178, introduced by Reps. Albio Sires (D-NJ), Mario Diaz-Balart (R-FL), Adriano Espaillat (D-NY) and Karen Bass (D-CA), opposes the inclusion of apparel, textile, and footwear products in the Generalized System of Preferences (GSP).
GSP gives duty-free treatment to imports from developing countries in order to encourage economic growth and help lift the poorest people in the world out of poverty. At the same time, GSP benefits American consumers -- particularly lower-income families -- by providing access to lower-cost goods.
Unfortunately, a decades-old loophole allows the United States to impose very high tariffs on clothing, textiles, and shoes from GSP-eligible countries. As of 2019, the average U.S. tax on imported clothing, textiles, and shoes was nearly 13 percent, based on chapters 50 to 64 of the U.S. Harmonized Tariff Schedule.
A primary beneficiary of this loophole is China, which accounts for more than one-third of U.S. imports for these products. Reducing taxes on imports from GSP countries would encourage production to relocate out of China to regions that are more friendly to the United States.
Some countries that already have tariff-free access to the United States may be concerned about how they would be affected by expanding low tariffs to additional countries. But policymakers should resist the temptation to pit one region of the world against another, or to pick winners and losers via trade policy.
Instead of policies like those promoted in H.Res 1178, Congress and the administration should welcome changes that encourage companies to produce in countries other than China while expanding trade and, most importantly, making shoes and clothing more affordable for American families.