In a differentiation effort and a true desire to inform and educate, I will try to not constantly reiterate and rant and rave about the same things all the conservative writers are ranting about. I am going to be reporting and commenting to you on items before and being considered by Congress that you will probably not read about elsewhere. In my professional capacity, I have to keep up with current events that may effect my industry. I stumbled upon this little tidbit last week, from a publication called Broker Power.
The undervaluation of China origin PERFORMANCE FABRIC textiles and apparel is thought to be a huge problem, in part because the textile and apparel industry represents 21% of all importers, 5% of the value of all imports, and 42% of all duties collected.
Thus, Customs and Border Protection will be investigating whether or not the value of the products coming into the country from China are fairly valued. Up until now, I would have been fine with this. Times have changed and I believe that the above move could be used solely for political gain and for gathering more money to the insatiable Federal Beast.
How it works is thus, each import into the USA has a declared value. The Importer pays duty and taxes on the value of the product plus the applicable duty rates. It is actually one of the only Constitutionally outlined and defined ways in which the Federal Government is allowed to tax you. It is also important for American business to compete on level playing fields and not suffer through “unfair” trade practices that artificially make a competitors product less expensive. Real cases like this would include foreign government subsidies to industries, prison or slave labor, large companies using predatory practices to run home industries out of business, but I digress.
The Government has limited leeway in raising duty rates for products because of global trade agreements and that type of thing sets off trade wars and all sorts of international attention – so in general, they don’t like to do it. Instead, they will take the valuation approach to accomplish the same goals.
This is how it works, if Customs determines that a t-shirt being imported is really worth $5.00 instead of $.50 then the duty and tax due on the product is increased greatly. The importer will then of course, include the increase in cost to you – the consumer of the T-shirt.