ITC Drops 4 Proposed Tariff Nos in Addendum Recommendations for Rubber-Soled Footwear
The International Trade Commission has posted its February 2011 report for Addendum Investigation 1205-8, which recommends a second group of new Harmonized Tariff Schedule numbers for the classification of certain Chapter 64 footwear featuring an outer sole of rubber or plastics with an added textile layer (textile-bottomed footwear). The ITC is recommending fewer tariff changes than proposed. When proclaimed, the changes will retain the affected footwear's lower HTS 6405 duty rates once they are classified in other subheadings due to a new chapter note.
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(See ITT's Online Archives or 03/25/11 news, 11032508, for BP announcement of report's availability. See ITT's Online Archives or 01/04/11 news, 11010427, for BP summary of ITC's proposed, larger list.)
2nd Set of Recommended Changes, Along with First Group, Expected to be Implemented Together
The U.S. Trade Representative had asked for this second investigation on November 8, 2010, based on industry requests, and the ITC's recommended tariff changes for this second group were sent to Congress for a required 60 legislative-day layover period on March 2, 2011.
A first group of recommended tariff changes (14 tariff numbers1) for similar footwear was sent to Congress for its 60 legislative-day layover period in September 2010. Sources have indicated that both sets of changes, along with a new HTS 64 Chapter note, are expected to be implemented by a single Proclamation.
(See ITT's Online Archives or 12/13/10 news, 10121322, for BP summary of first group of recommended changes.)
Both Sets of Changes Intended to Retain Lower HTS 6405 Duty Rates when New Note Implemented
The ITC is recommending that the President proclaim a new Additional Note 5 to Chapter 64 to state 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 the outer sole.
If nothing more were done, the new Chapter note would move affected footwear to HTS 6404 and 6402 tariff numbers that have duty rates ranging from 48% to 90 cents/pair + 37.5%, from their current classification in HTS 6405 (at 7.5% or 12.5% duty rates).
In order to avoid these higher duty rates, the ITC is recommending that new tariff numbers in HTS 6404 and 6402 (7.5% and 12.5% duty rates) be created when the new note is implemented by proclamation.
Addendum Report Recommends 7 New HTS Numbers
In its Addendum report, the ITC is recommending the following additional, new Chapter 64 tariff numbers, and associated duty rates:
| Recommended HTS No. | Duty Rate |
|---|---|
| 6404.19.42 | 7.5% |
| 6404.19.52 | 7.5% |
| 6404.19.72 | 7.5% |
| 6404.19.82 | 7.5% |
| 6404.11.75 | 12.5% |
| 6404.11.85 | 12.5% |
| 6402.99.412 | 12.5% |
List Is Shorter than Proposed, as Four Proposed Nos Could Not be Substantiated
This list is different from the proposed list issued by the ITC. According to ITC sources, four proposed tariff numbers had to be dropped, as importers did not substantiate that there were affected footwear imports. The four proposed tariff numbers that were dropped are HTS 6404.19.47, 6404.19.57, 6404.19.77, and 6404.19.87, all at a 12.5% rate.
(Note that as a consequence of creating the new tariff numbers (both the first and second groups), a number of existing, unaffected tariff numbers are expected to be renumbered without a change in their duty rates.)
1The 14 recommended new tariff numbers3 for the first group (to be created by Proclamation) were listed by the ITC as:
| Recommended HTS No. | Duty Rate |
| 6402.99.61 | 12.5% |
| 6402.99.71 | 12.5% |
| 6404.11.41 | 7.5% |
| 6404.11.51 | 7.5% |
| 6404.11.61 | 7.5% |
| 6404.11.71 | 7.5% |
| 6404.11.81 | 7.5% |
| 6404.19.36 | 7.5% |
| 6404.19.37 | 12.5% |
| 6404.19.41 | 12.5% |
| 6404.19.51 | 12.5% |
| 6404.19.61 | 12.5% |
| 6404.19.71 | 12.5% |
| 6404.19.81 | 12.5% |
2Incorrectly listed as 6402.99.49 in a table in the report, but correctly listed in Appendix C.
3The ITC states that certain of the recommended tariff numbers in the first group will need to be renumbered as a result of the Addendum report (as indicated in Appendix C), but this renumbering is technical only and does not substantively change its original recommendations.
(See ITT's Online Archives or 03/04/11 news, 11030436, for BP summary stating that the second set of changes was sent to Congress.
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 time frame.
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 on Investigation 1205-8 covering the first group of recommended changes.)