ITC Proposes Addendum Classification Changes for More Rubber-Soled Footwear

The ITC also proposes to modify certain of the new HTS numbers it recommended in its earlier, August 2010 report on Investigation 1205-8.

Written comments on these addendum proposals are due by January 12, 2011. (In an earlier August 2010 report for the main investigation, the ITC had recommended 14 new tariff numbers.)

Addendum Investigation due to Request from USTR and Trade Concerns

The U.S. Trade Representative had asked for this addendum investigation on November 8, 2010, based on industry requests, including requests for additional tariff numbers for rubber or plastic outer soled shoes with uppers of man-made fibers (MMF), as the need for these additional numbers became apparent after the ITC published its August 2010 report.

An earlier August 2010 report had recommended 14 new tariff numbers in HTS 6402 and 6404 for footwear that would be affected by a proposed new Additional Note 5 to HTS Chapter 64. These 14 new numbers would move affected footwear into HTS 6402 and 6404 from HTS 6405, but would retain the lower HTS 6405 duty rates.

(The ITC has stated that the text of Additional Note 5¹ is based in part on various WCO decisions and rulings, and to provide a better basis for applying Note 4(b) to HTS Chapter 64.)

ITC Proposes Seven More Nos and Four Modifications

The ITC is proposing an additional seven tariff numbers at the 8-digit level that would be created for certain footwear with uppers of textiles other than vegetable fibers, with an outer sole of rubber or plastic with an added textile layer (with duty rates of 12.5%):

The ITC is also recommending that four tariff numbers (at the 8-digit level) listed in its August 2010 report be amended in both their description and duty rate. Their new descriptions would be for uppers of vegetable fibers, with an outer sole of rubber or plastic with an added textile layer, and their proposed duty rate would be 7.5% (from 12.5%):

The ITC also recommends several tariff lines be added as a consequence of the above proposed changes, for example, HTS 6402.99.49 (37.5%).

¹Additional Note 5 to Chapter 64 would state: “For the purposes of determining the constituent material of the outer sole pursuant to Note 4(b) to this Chapter, no account shall be taken of textile materials which do not possess the characteristics usually required for normal use of an outer sole, including durability and strength.”

Treasury has stated that the new note would clarify that textile materials (e.g. textile layers) that do not possess the characteristics usually required for normal use of an outer sole (e.g. durability, strength, etc.) should not be taken into account for classification purposes when added to an outer sole.

This means for example, that for rubber or plastics outer soles, textile materials that are not durable, strong, etc. should be considered “accessories and reinforcements” by existing Note 4(b) to HTS Chapter 64, and ignored for classification purposes.

(See ITT’s Online Archives or 12/14/10 news, 10121351, for BP summary stating that the ITC hopes that once the Congressional lay over periods for the original investigation and addendum investigation end, both sets of changes will be implemented by a single Proclamation, with a trade source speculating that implementation could occur during the July 1, 2011 timeframe.

See ITT’s Online Archives or 12/06/10 news, 10120637, for initial BP summary of the ITC’s announcement of the addendum investigation.

See ITT’s Online Archives or 12/13/10 news, 10121322, for BP’s detailed summary of the August 2010 report, listing the 14 tariff numbers recommended at that time.)

** ITT article revised on March 28, 2011 for clarity.