Ballcap industry alliance formed in opposition to Section 301 tariffs - Global Trade Magazine
  September 18th, 2018 | Written by

Ballcap industry alliance formed in opposition to Section 301 tariffs

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  • The Trump administration has proposed a tariff increase to the headwear category (HTSUS 6505.00).
  • Industry group: Tariffs on imported Chinese-made headwear will kill the industry.
  • Duties on imported ballcaps will increase from 7.5 percent up to 32.5 percent.

Can you imagine going to the big game without your favorite team’s baseball cap–the playoffs, the championships or the World Series?

According to industry executives, Section 301 tariffs will be devastating to America’s headwear industry—killing jobs and shutting down growth. The USTR’s comment period conclude recently, and the buzz in Washington is tariffs could be imposed at any time.

The Trump administration has proposed a tariff increase to the headwear category (HTSUS 6505.00) in the case being considered by the United States Trade Representative for Section 301 tariffs (Docket Number: USTR-2018-0026).

To educate decision-makers and opinion leaders about the facts, America’s baseball cap industry has created the American Headwear Alliance (AHA)—and the organization’s officials say are not going to go down quietly in this battle. The AHA includes eight companies located in Massachusetts, Texas, Maryland, Missouri, Arkansas, and Oregon.

The AHA recently sent a letter to US Trade Representative Robert Lighthizer, making the following points: that tariffs on imported Chinese-made headwear will kill the industry; the cut-and-sew industry in China can’t just move to the US; that baseball cap imports have become one of America’s biggest international trade intellectual property and human rights success stories; that the industry’s imports are low-tech and pose no risk to national security; and that Section 301 tariffs on imported headwear will not help the Trump Administration attain its goals.

According to the letter, “The majority of our imported products will increase from 7.5 percent up to 32.5 percent on average, which will result in our companies attempting to balance an enormous annual cost increase that will be difficult, if not impossible to accomplish. It’s very unlikely customers of our products can afford to—nor would they choose to—pay 25 percent more for a ballcap.”

The companies are concerned that their businesses will stagnate and decline. The infrastructure required to produce ballcaps moved overseas decades ago and it is doubtful it could be re-established in the US. “There are currently no operations outside of China that could produce the quality of goods at the volume output required by our companies,” the letter said.