EU Abandons Retaliatory Tax on U.S. Jeans

— March 28, 2014

Effective May 1, the European Union will drop a 26 percent retaliatory tax on women's jeans made in the U.S. to 0.35 percent.  This move will lower the EU duty rate on such jeans to 12.35 percent a year after it saw a significant increase in an ongoing trade dispute.

The California Fashion Association has been actively working since the EU imposed the tariff hike to obtain relief for affected U.S. manufacturers. The California Fashion Association, working with Tom Travis, managing partner of Sandler Travis & Rosenberg P.A. (ST&R),  were instrumental in alerting California premium denim brands and, acting as a coalition of the major brands in the region's denim industry, informed members of the California legislature.  

The duty rate hike on jeans was part of a continuation of sanctions authorized by the World Trade Organization in retaliation for the United States' failure to fully comply with a WTO ruling commonly referred to as the Byrd Amendment.  

Last April, U.S. blue jeans manufacturers were jolted by the EU's decision to dramatically increase tariffs on specific US-made goods, including high end women's denim jeans manufactured by the revitalized southern California garment industry.  The EU had announced that the tariff increase on 'women's denim trousers' would jump more than 200 percent, effective May 1, 2013.    

The California Fashion Association immediately contacted its members, as well as those involved in the region's denim industry whose brand was not on the CFA's roster, and reached out to many facets of the media and legislators.  Since then, ST&R attorney Elise Shibles has been helping U.S. jeans manufacturers that had been paying the higher 38 percent duty to secure refunds.

This is a clear example of the effectiveness of a coalition of companies, acting together, on issues that affect their mutual interests and the over-all California industry.

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