Sens. John Ensign (Republican-Nevada) and Maria Cantwell (Democrat-Washington) recently introduced the Affordable Footwear Act of 2009 (S. 730), which would provide duty-free treatment to U.S. imports of a wide variety of shoes, including lower- to moderately-priced footwear and children's shoes. The legislation, which aims to remove a tax that no longer serves a protective purpose and imposes a heavy burden on poorer consumers, was originally introduced by Reps. Joseph Crowley (Democrat-New York) and Kevin Brady (Republican-Texas) during the previous Congress, where it garnered the explicit support of approximately one-third of lawmakers.
The legislation states that duty rates for imported footwear go as high as 67.5 percent and are larger on lower-priced footwear, serving as a "hidden, regressive tax on those people in the United States least able to pay." Supporters of the legislation have stated in the past that the original purpose of these duties - to protect domestic production - is no longer valid since 99 percent of all footwear currently sold in the U.S. is imported. According to the American Apparel and Footwear Association, this legislation would provide duty-free treatment to about 60 percent of all shoes imported into the United States and would not affect U.S. production, which has largely disappeared and currently focuses on niche items differentiated by quality, brand, specialised purpose or other non-price elements.
This legislation could be considered in a stand-alone form or more likely as part of the miscellaneous trade bill that is expected to be drafted and considered by Congress this year, primarily to extend a range of expiring duty suspensions. If approved, this duty relief could provide a considerable boost to both U.S. retail sales of footwear and U.S. footwear imports from China. Mainland China is by far the largest U.S. footwear supplier with a share of about 86.8 percent of the import market in terms of quantity and 74.4 percent in terms of value in 2008. U.S. footwear imports from China have been sluggish since 2007, however, with shipments declining by 6.8 percent in quantity terms (+0.8 percent in value terms) in 2008 and falling by 9.1 percent in quantity terms and 2.2 percent in value terms during January-February 2009.
When asked about the legislation during his confirmation process, U.S. Trade Representative Ron Kirk said that "the most appropriate venue for considering reduction or elimination of footwear tariffs remains the Doha Development Agenda round of multilateral negotiations." This statement suggests that the Obama administration is unlikely to support the legislation because it would rather use the high duties on footwear as a bargaining chip in the Doha Round.
