The American Apparel and Footwear Association (AAFA) is joining the Footwear Distributors & Retails of America (FDRA), the Outdoor Industry Association and the Sports & Fitness Industry Association in urging Congress to “modernize and clarify” the U.S. Harmonized Tariff Schedule (USHTS) code’s definition of athletic footwear.
In a letter sent to Congress, the AAFA noted that virtually identical running shoes are classified differently because one contains an internal membrane for protection against outside elements, and the other does not. The letter said, “The classification of trail running shoes, hiking shoes, and trekking shoes as ‘protective’, intended to cover footwear such as firemen and rain boots, fails to recognize modern athletic activities and the development of technology to give runners and hikers protection against inclement weather.”
Due to the current definition of athletic footwear, Customs and Border Patrol (CBP) applies the “protective” duty rate of 37.5% instead of the “athletic footwear” duty rate of 20 percent, which the AAFA said prices out shoes European and Asian consumers enjoy out of the U.S. market. AAFA called the 17.5% differential a “penalty on innovation.”
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The AAFA said an added benefit of the change would also help simplify CBP’s enforcement of the athletic footwear duty provisions, as the CBP would no longer need to “dissect identically-appearing shoes to determine if they contain a laminated internal membrane.”
In the letter, AAFA concluded that by modifying USHTS’s definition of athletic footwear, American consumers would not only have greater access to innovative footwear, but it would also help create more well-paying jobs and promote further footwear advancements in the U.S.