The U.S. Hide, Skin and Leather Association (USHSLA) submitted comments to the Office of the U.S. Trade Representative (USTR) in support of Tapestry, Inc.’s request to exclude from the Section 301 tariff action leather handbags and travel goods made in China using U.S. origin hides.
USTR is proposing to levy 25% tariffs on these aforementioned leather imports from China, as part of the Administration’s Section 301 investigation into China's acts, policies and practices related to technology transfer, intellectual property and innovation. Currently, most U.S. hide and skin product exports to China are subject to between five and 10 percent retaliatory tariffs.
“USHSLA fully supports the tariff exclusion requests submitted by Tapestry, Inc. for leather handbags made in China using U.S. origin hides, skins and leather,” USHSLA President Stephen Sothmann states in the comments. “Leather handbags and other finished leather goods imported from China are closely linked to U.S. agricultural exports, as U.S. hides, skins and leather are the key input for China’s leather industry.”
“By assessing the 25% tariff on these finished leather goods, our U.S. value cattle hides are subject to triple taxation – taxation on the cattle as they are produced and slaughtered in the U.S.; taxation on the hides imported into China; and taxation on the finished leather handbags imported into the U.S.,” Sothmann writes in the comments.
“Placing tariffs on products that use substantial U.S. inputs – such as the leather handbags and travel goods under discussion – also affect the more than 26,000 Americans involved in the processing of hides and wet blue tanning, along with individuals employed in ancillary industries, including chemical manufacturers and suppliers,” the comments continue.
In addition to the direct, detrimental impact of these tariffs on the U.S. hide, skin and leather industry, the comments note that these tariffs also will affect the financial viability of U.S. cattlemen and ranchers. The use of U.S. hides and skins – major byproducts of the cattle and meat industry – in leather handbags and other travel goods around the world provides additional income directly to American farmers.
Approximately 95% of U.S. hides, skins and wet blue leather products are exported each year, with China importing over 50% of total U.S. production. In 2018, the U.S. exported more than $700 million worth of cattle hides, pig skins, and semi-processed leather products to China’s booming leather and footwear manufacturing industries – the first time since 2009 that those exports totaled less than $1 billion in value.