A Hidden World of Tariffs

As I've said before, for those procurement organizations which are increasingly focused on global sourcing (and sourcing to serve production and demand in local markets), it's more than worth embracing your customs and trade team (which often have far too few dealings with sourcing groups). And that's because when it comes to global sourcing, the hidden costs of trade can come back to bite (or can be ameliorated through such artifices as trans-shipping and other clever devices which the customs and trade folks are likely to know about). Even though I tend to approach global sourcing from a procurement perspective, I still find articles like this one in World Trade Magazine on the history of shoe tariffs fascinating.

According to the story, high shoe tariffs (10 times the average rate) date back a century in the United States (which is incredibly ironic considering that it's impossible to profitably build a shoe manufacturer in the US now). The article notes that "the little-known shoe tax has its roots in the early history of American trade policy. A hundred years ago, tariffs raised most of the government's revenues. But after six decades of trade liberalization, the tariff system is now a small backwater in tax policy (there are no tariffs on toys, furniture, semiconductor chips, personal computers, or telephones)." Fortunately, there is a bill in front of Congress which might reduce the imported shoe tariff for those imports which are most impacted (e.g., Chinese and Vietnamese shoes). Still, stories like this are further proof of the arcane system of tariffs and import duties which your customs team is qualified to figure out the workarounds on.

- Jason Busch

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