Imports work for America


To paraphrase Milton Friedman and Richard Nixon, we are all importers now.

How do I know?

Chances are you are reading this while you are dressed.

Chances are — with approximately 98 percent of the clothes and shoes we buy each year being made offshore — you have imports in your closet.

Chances are you are wearing imported products right now.

Sadly, the American public knows little about U.S. imports — often overlooked in U.S. trade policy — and the important role they play in our lives. Rather, lots of attention is devoted to U.S. exports and the jobs and opportunities they create.

{mosads}Take a look at the Trans-Pacific Partnership (TPP). We hear a lot about the 18,000 tariffs that our 11 TPP trading partners are going to cut, enabling U.S. exports to find a greater share of those market in a region that equals approximately 40 percent of the world’s economy and encompasses 800 million consumers. That’s great. But missing from that 18,000 statistic are the 6,000 or so tariff cuts that the United States will also make once the agreement goes into effect.

Telling this half of the story is important too, and further underlines the benefits of the TPP agreement itself. U.S. negotiators were able to secure a wide range of market access gains, trade disciplines and other wins because the United States is willing to open its market, too. Simply put, we achieved those 18,000 in tariff cuts because we were prepared to make 6,000 in cuts ourselves. Looking at it another way, our exporters gain new markets because we as a country are willing to import.

But the benefits go way beyond that. Tariff cuts on U.S. imports not only open up foreign markets, but they also mean a tax cut for U.S. consumers. Let’s see how that works. Look around at the people near you — whether you are in a cafe, on a Metro car or at your desk at work. Just about everybody you see has a wallet, purse, tote bag, backpack, smartphone case or laptop case. Some have more than one. Very few of these products are made in the United States, but over 10 percent are imported from Vietnam, one of the TPP partners. In 2015, we paid $124 million in duties on those imports. Under the TPP, these duties all drop to zero the first day the TPP takes effect. When the TPP takes effect, your purse could become more affordable and there could be more money in it, too.

U.S. manufacturers also stand to benefit as tariffs on inputs from TPP partners are reduced or eliminated. But this opportunity doesn’t stop with TPP. It also exists on a global scale. Congress seems to understand this, as well. It just cleared legislation to enable U.S. companies to petition the U.S. International Trade Commission (USITC) to temporarily reduce or eliminate duties on any items and inputs that they can’t find in the United States. The National Association of Manufacturers (NAM) estimates that the lack of this authority cost U.S. manufacturers $750 million since it expired three years ago. Now these companies will be able to plow those tariff savings into their supply chains, their payroll, their factories and their design labs. And this makes them more competitive, giving them more export opportunities. It’s no wonder that former World Trade Organization (WTO) Director General Pascal Lamy once said that “you need imports to be able to export.”

The power of imports is felt throughout the developing world, too. Programs like the Generalized System of Preferences (GSP) and the African Growth and Opportunity Act (AGOA) give companies throughout the developing world the ability to export products to the United States duty-free. This makes them competitive with large-scale exporters like China, and also leads to the employment of millions of individuals, lifting whole families and communities out of poverty. It’s no wonder that those programs are often renewed by Congress with significant bipartisan majorities.

Which takes us back to your closet. Even though most of the contents of your wardrobe is imported, much of that fashion represents considerable U.S. value — approximately 70 percent, according to a recent study. How is this possible? While much of the production occurs overseas, many of the other jobs that convert clothing from concept to consumer occur in the United States. In fact, the U.S. apparel and footwear industry employs approximately 4 million U.S. workers in a variety of functions: design, research and development, logistics, marketing, sourcing, quality control, product safety, retail — and the list goes on.

The bottom line is that imports work for U.S. manufacturing, U.S. jobs, American families and the developing world.

Lamar is executive vice president of the American Apparel and Footwear Association (AAFA), one of the organizations supporting the Fifth Annual Imports Work Week this year (May 9 to 13).

Tags African Growth and Opportunity Act AGOA Generalized System of Preferences GSP import Tariff TPP Trade Trans-Pacific Partnership U.S. International Trade Commission USITC
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