Support Efforts to Reduce Tariffs on Footwear & Performance Outerwear Policy Factsheet

BACKGROUND is home to the headquarters of a significant number of retailers that import footwear and performance outerwear, such as REI, , and Eddie Bauer. Legislation to reduce tariffs on these products, such as the Affordable Footwear Act and the U.S. OUTDOOR Act, would save consumers money while improving profits for our retailers and for our apparel compa- nies that do their manufacturing overseas. More sales for these companies means more high-skill jobs – like research, design and merchandising – for our state’s residents.

Affordable Footwear Act The Affordable Footwear Act (AFA) would eliminate costs from import tariffs on many lower to moderately-priced and children’s shoes. Now that 99 percent of shoes are imported to the U.S., these tariffs – originally put in place to protect the domestic shoe manufacturing industry – only serve to create higher costs for retailers and consumers. Low-priced shoes face tariffs as high as 37.5 to 67.5 percent, higher than any other product category. This tax disproportionately harms low and middle-income families, as tariffs on more expensive, luxury footwear purchased by upper-income individuals are much lower.1 The AFA was co-sponsored by both Senator Patty Murray and Senator Maria Cantwell.

U.S. OUTDOOR Act The United States Optimal Use of Trade to Develop Outerwear and Outdoor Recreation (U.S. OUTDOOR) Act would create a sepa- rate classification for “recreational performance outerwear,” dividing these specialty products from mass produced garments that have high tariffs. The bill would make these products more affordable and add to the $730 billion U.S. outdoor industry that sup- ports 6 million employees. The bill will also set up a Sustainable Textile and Apparel Research (STAR) Fund to support research and trainings in sustainable manufacturing and supply chain practices. The U.S. OUTDOOR Act was co-sponsored by Representa- tive Dave Reichert.

WHY IT MATTERS TO WA The industry in Washington supports 34,460 local jobs at 1,540 companies in the state.2 In 2012, Washington imported more than $1.5 billion in apparel and $376 million in footwear.3 With low-priced footwear tariffs as high as 67 percent1 and out- door apparel as high as 28 percent,4 retail companies such as REI, Nordstrom, Eddie Bauer and spend billions in import taxes which are passed on to consumers. When the two bills are in place, consumers will be more able afford footwear and out- door apparel, promoting Washington’s active lifestyle while generating increased sales for Washington retailers and jobs for Washington residents. 1200 2012 Retail Imports to WA 1000

800 600 Knit apparel 400 Non-knit apparel 200 Footwear

0 Total Total Dollar Value (in millions)

Top Importig Countries

1 RILA, Affordable Footwear Act, 2011 | 2 enterpriseSeattle, 2010 | 3 WISER Trade. 2013 *Imports through WA ports only, apparel total is knit and non-knit |4 .S. Outdoor Industry Association, Press Release, April 5, 2011 Affordable Footwear Act & U.S. OUTDOOR Act Policy Factsheet

POLICY FAQS 1. Will eliminating the import tariffs create less protection for our domestic retail markets? Almost 99 percent of shoes pur- chased in the U.S. are imported.5 In regards to outerwear, the majority is also manufactured overseas and imported to the U.S. Since the U.S. does not have a large retail manufacturing industry, shoe and apparel imports are our main source of these products. In addition, apparel and footwear face unreasonably high tariffs, well above the average import duty of two per- cent.6 2. How will the remaining domestic apparel manufacturers be affected? The AFA does recognize there is a small, yet important domestic footwear manufacturing market. According to the American Apparel and Footwear Association, domestic producers support the AFA.7 The U.S. OUTDOOR Act will support domestic manufacturers with the STAR Fund. 3. Why import retail products? Imports create a globally competitive supply chain by allowing Washington-based retailers to focus on the creation of local jobs in design, marketing, finance and other long-term career positions. The cost savings of manufacturing overseas decrease the sticker price, creating more sales locally.

FAST FACTS  is the third best retail market in the U.S.2  $8.3 billion in revenue from the WA apparel and footwear industry in 20092  Low-priced footwear faces a tariff of 37.5% to 67.5%, while luxury footwear’s tariff rate is only 20%1  Largest import apparel markets to WA: China, Vietnam, Indonesia, Cambodia, Bangladesh3  Largest import footwear markets to WA: China, Vietnam, Indonesia, Thailand, South Korea3  Port of Tacoma imported $1.2 billon of footwear goods in 20128  Port of Seattle (waterborne) imported $1.2 billion of footwear goods and $2.2 billion in knit apparel in 20119

WA BASED RETAIL COMPANIES Amazon.com High 5 Sportswear Beyond Clothing Mountain Hardware Brooks Sports Nordstrom Cascade Designs Columbia Sportswear REI Costco SanMar Cutter and Buck The North Face Eddie Bauer Tommy Bahama ExOfficio Union Bay Filson Zumiez

An REI employee tries on shoes at the Seattle flagship store. Companies like REI would benefit from the AFA and U.S. OUTDOOR Act.

5 NRF, Press Release, March 31, 2009 | 6 U.S. Outdoor Industry Association, Press Release, April 5, 2011 | 7 AAFA, Press Release, July 29, 2011 | 8 Port of Tacoma, Facts & Stats, 2012 | 9 Port of Seattle, Foreign Waterborne Trade Report, 2011