U.S. levies 5% tax on Honduran socks despite FTA

The United States has levied a five per cent tariff on imports of socks from Honduras. Although the levy is lower than local producers feared it would be, it is still surprising, given the presence of a free trade agreement between the two countries.

Tuesday, April 22, 2008

"The import tax that will apply to the importation of socks will be five per cent from July to December and will disappear in January 2009," the president of the Association of Maquiladoras of Honduras, Jesús Canahuati, told reporters.
The Americans say they imposed the tariff because imports from Honduras have doubled since the treaty went into effect in 2006, and are causing job losses in the U.S.

However, the Honduras product serves only about 10 per cent of the market, while sock imports from Pakistan and China provide about 50 per cent of the market supply.

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After the U.S. socks tariff was waived on January 1st, exports have increased 15%.

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