[CTC] Statement of Chairman Levin on China's Exchange Rate Policy

Wed Mar 31 08:52:33 PDT 2010

Tariffs are higher on women's underwear than men's.

THE NUMBERS: Tariffs on underwear:

SILK

COTTON

POLYESTER

WOMEN'S

1.1%

7.6%

15.6%

MEN'S

0.9%

7.4%

14.9%

WHAT THEY MEAN:

Sensational, crowd-pleasing scandal? At first glance, intimate-apparel
tariffs reveal a startling tilt against women and girls. Women's silks and
cottons get tariff tax rate 0.2 percent higher than men's, and the premium
is 0.7 percent on women's polyesters. No such tilt appears in the tariff
systems of other big trading economies, including the European Union, India,
Japan, China and Mexico.. Overall, lingerie tariffs brought in about $400
million last year -- in the $21 billion tariff system, about two cents in
each tariff dollar -- while men's underwear raised a token $40 million. 

But a closer look finds that the apparent misogyny of American underwear
tariffing is an anomaly rather than a pattern. Men's and women's shirts are
taxed equally: men and women alike face an 0.9 percent tariff on silk
shirts, 19.7 percent for cotton, and 32 percent for polyester. Same goes for
leather jackets and pants. In bathing suits the pattern reverses, with
higher tariffs for men and boys.  Overall, the tariff system has no clear
pro-man or pro-woman pattern.

The real tilt is in favor of wealthy shoppers and against low-income
families. In total, clothing tariffs raised $8.3 billion last year, and
shoes $1.7 billion; by contrast, cars raised only $1.2 billion, oil and
gasoline $210 million, gems and jewelry $182 million and steel $50 million.
Any tax which raises most of its money from shoes and clothes will hit poor
people harder than others. And the tariff system is especially regressive,
since - in underwear and virtually all consumer goods, from plates and
spoons to luggage, shirts and shoes -- its rates are highest on cheap and
simple products like the polyester briefs, and lowest on exotic luxuries
like the silks. Some more data to go with the underwear: 

PRODUCT

LUXURY

MEDIUM

CHEAP 

Sweater

Cashmere 4.0%

Wool 17.0%

Acrylic 32%

Brassiere

Silk 2.7%

---

Polyester 16.9%

Shoes

Leather Dress 8.5%

Elite Running Shoe 20%

Sneaker, Under $3 48%

Spoon

Sterling 3.3%

Silver-plated 4.2%

Stainless Steel 14%

Handbag

Snakeskin 5.3%

Leather 10%

Canvas 16%

The bias has grown rather than narrowing in the last 20 years. Here again
the case of underwear is typical. Tariffs on silks were the same as tariffs
on polyesters until the mid-1990s. The 1994 Uruguay Round agreement that
created the WTO cut the silk rates down to very low levels -- happy belated
Valentine's Day, lovers -- but taxation of imported cottons and polyesters
remained high. 

FURTHER READING: 

Comparing the tariff system to the four other main federal taxes -- income,
payroll, excise and estate -- the DLC's Ed Gresser finds it the only one to
tax low-income families at higher rates than middle-class and wealthy
families: http://www.dlc.org/ndol_ci.cfm?kaid=108
<http://r20.rs6.net/tn.jsp?et=1103082977301&s=38031&e=001FT1W-pP93Lytiz1kmzq
1vAjccD5CmlkCGdnK4y1KHeom4BuALL0dEzLDNIqfM7-1QaYlwecQMkdV5lLv9IvwlNfHMuJE-Up
7ACMzNVCAVUhi5FEP8mdSNpBitAabv4eAb2V6D-9CiN15NW6WRx48yGDJEO76imDmueweh-EoWks
D3bBEslrD2qC5utCz4Pfu> &subid=900010&contentid=250828

The tariff schedule: http://hts.usitc.gov/
<http://r20.rs6.net/tn.jsp?et=1103082977301&s=38031&e=001FT1W-pP93LxbcjdjHqX
7cDBXfaLVJvK94rejGziEGgx47ntCTskAB0cZyXqmP8AaNwyqkC5F3N_G-bJ7R0v_S_-ZE1DGuLb
o0ianZkaThWYHf1XRYyy3Sw==> 

The Organization of Women in International Trade:
http://www.owit.org/en/Home/Index.aspx
<http://r20.rs6.net/tn.jsp?et=1103082977301&s=38031&e=001FT1W-pP93LzoDNE0xij
pcYfLK-73LlWeqg34loCD2b359dXmB-rx7pjbJHnYOJbTV2XXazPU7AtLYNsVHgd_LDfCb3kiuBT
CIFwWJ_g56VeLpIuFUzBLXiDbrE183FGkLJXHux4cBqM=> 

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