Europe To Charge Tariffs On US Imports

The EU is to charge a 15 percent tariff on certain US apparel items, after US Congress failed to rescind the Byrd Amendment, which was ruled illegal by the World Trade Organization. Most classes of man-made fiber or cotton trousers and shorts are affected by the tariffs, as are goods from other industries such as sweet corn and writing pads.

The Byrd Amendment allows for the collection of tariffs on foreign goods when they are sold in the U.S. for less than they are in their home country. The funds collected from those duties are redistributed to domestic companies that lost business to the low-priced goods. From 2001 to 2003, about $728 million in tariffs was collected and redistributed by the U.S under the provision, which was ruled illegal by the WTO in January 2003.

The WTO allows for punitive tariffs, but ruled the U.S. cannot redistribute the funds in such a way, opening the door to the tariffs on U.S. goods. The EU might expand the duties to include other goods such as cotton sweaters, cotton dresses and jeans until the Byrd Amendment is rescinded.

Julia Hughes, vice president of international trade for the U.S. Association of Importers of Textiles & Apparel, said Europe has used duties on apparel products in such a way before, although the initial rate wasn't as high. "At 15 percent, you're definitely going to see some impact on pricing, especially with the dollar being low and the euro being high," Hughes said to WWD.