Footwear makers target tariffs

WASHINGTON -- Footwear makers and retailers are trying to stomp out a Depression-era federal shoe tax, a move they say could save American consumers hundreds of millions of dollars annually and kick-start relatively flat footwear sales.

The industry has been lobbying lawmakers weekly since the summer to get them to exempt certain categories of footwear -- including all children's shoes -- from the import tariffs that can run as high as 67.5 percent a pair.

Imposed in the 1930s, the tariffs were designed to protect a domestic manufacturing industry from cheap imports. But that industry has largely disappeared in the past 20 years, as manufacturing overseas has become easier and cheaper.

"It's an anachronism," Peter T. Mangione, president of the Footwear Distributors and Retailers of America, said of the tariffs. "It's just completely out of sync with what we need today."

Of the 2.4 billion pairs of shoes Americans bought in 2006, nearly 99 percent were made overseas, mostly in China, according to the American Apparel and Footwear Association.

U.S. shoe tariffs are among the highest in the world, compared with the European Union's 17 percent, Japan's 10 percent or Chile's 6 percent duties.

Even those last-standing domestic shoemakers, represented by the Rubber and Plastic Footwear Manufacturers Association, and some companies, including privately held New Balance, which makes 25 percent of its products in the United States, support the bill.

"For the first time ever, we've got a united footwear industry," said Brad Figel, global director of government affairs for Beaverton, Ore.-based Nike.

By framing the issue as tax relief for consumers, the trade groups say they've gained a bipartisan foothold in Congress.

The shoe bill will likely be tied into a typically "contentious" general tax or trade bill -- a pairing that could jeopardize its chances "even if this particular issue has no particular enemies," said Ed Gresser, Progressive Policy Institute's trade policy director.

The proposed legislation wouldn't repeal the duties entirely, but it would eliminate about $800 million paid annually to the U.S. Treasury, which collected nearly $2 billion in 2006 just from shoe-import duties.

Any savings is significant, tariff critics say, because the biggest dent would be in low-cost footwear and all children's shoes -- items most likely on the shopping list of lower-income families.

Kevin Burke, president of the American Apparel & Footwear Association, said, as an example, a high-end casual leather men's boat shoe that sells for $189.95, includes a 6.9 percent duty, or $13.13. But a pair of canvas casual shoes for a young girl, priced at $14.99, contains a 28.8 percent duty, or $4.32.

"That's ridiculous," said Burke.