Changes Needed to HTS Definition for Athletic Footwear, Trade Groups Tell Congress
Congress should pass legislation to modernize the treatment of footwear in the Harmonized Tariff Schedule so that new and innovative types of athletic shoes aren’t hit with high duties on protective footwear, said a group of trade associations in an April 8 letter to Senate Finance Committee and House Ways and Means Committee leadership (here). The simple addition of an internal membrane to athletic shoes should not change its HTS classification from sports and athletic footwear, dutiable at 20 percent, to protective footwear like fireman and rain boots, which carries a 37.5 percent duty, said the American Apparel & Footwear Association, Footwear Distributors and Retailers of America, Outdoor Industry Association and Sports & Fitness Industry Association in the joint letter.
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The current footwear classification scheme is stifling innovation in the footwear industry as more advanced shoes are priced out of the market, said the trade groups. “The classification of trail running shoes, hiking shoes, and trekking shoes as ‘protective’ … fails to recognize modern athletic activities and the development of technology to give runners and hikers protection against inclement weather,” they said. “By applying the ‘protective’ duty rate of 37.5% instead of the ‘athletic footwear’ duty rate of 20%, many shoes are out of reach of runners and hikers who wish to exercise in less than ideal conditions, and prices some footwear entirely out of the U.S. market,” said the letter. “As a result, consumers in Europe and Asia today have access to U.S. innovative footwear that American consumers do not,” it said. “The 17.5 % differential is nothing more than a penalty on innovation.”
Congress needs to “take action to modify the athletic footwear definition” in the HTS, said the trade groups. Such a change would promote innovation, create more well-paying jobs in the U.S., and give consumers access to new advances in shoe technology, they said. It would have the added benefit from simplifying CBP’s enforcement of duties on athletic footwear, said the letter. CBP would no longer need to dissect identical looking shoes to see if they have a laminated internal membrane. “This undoubtedly will save time and resources for already heavily burdened CBP officials,” said the letter.