AAFA Fights European Tariff on U.S. Goods

The American Apparel & Footwear Association asked Congress for help this week after the European Union placed punitive tariffs on U.S. products to retaliate against the United States’ policy of granting export tax relief to certain U.S. companies.

Kevin M. Burke, president and chief executive of the Arlington, Va.–based trade organization, urged Congress to repeal the Foreign Sales Corporation and Extraterritorial Income Exclusion (FSC/ETI) Act, which some consider to be an export subsidy, and replace it with a set of bills that would create laws mandating tax incentives more amenable to Europe.

The FSC/ETI bills, deemed illegal by the World Trade Organization, give tax breaks to some U.S. companies that export American-manufactured goods. In retaliation, the European Union slapped a 5 percent tariff on a range of products, including the $300 million in American apparel and footwear sold annually in Europe. The EU will increase the tariff by 1 percent on the first of each month for one year.

“This [new] legislation would not only remove the burden that discourages our exports to Europe, but it will also make needed changes to U.S. tax laws to improve the competitiveness of U.S. apparel, footwear and travel-goods manufacturers,” Burke said in a prepared statement. —Andrew Asch