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 Bush administration decided yesterday to impose a 5 percent tariff on Honduran socks later this year after finding that imports of low-priced cotton footwear from Central America were hurting struggling sock makers in North Carolina and Alabama.
Just two years after launching an ambitious plan to become a major player in the North American hosiery business, Gildan Activewear Inc. finds itself caught up in an international trade dispute over the flood of socks into the U.S. from Honduras.
After the U.S. socks tariff was waived on January 1st, exports have increased 15%.
Socks exports to the United States will reach $5.4 million by the end of the year, 101% more than 2008, when $2.7 million were sold.
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