By  on July 29, 2010

WASHINGTON — Congress has sent a tariff suspension bill to President Obama, ending seven months of increased duties on imported textiles, footwear and apparel components and relieving some of the cost pressures the industry has been facing.

The Senate passed the measure by voice vote Tuesday night, sending the measure to the president, who is expected to sign it.

The House passed the bill last week on a vote of 378 to 43.

Apparel, textile and footwear companies have been paying thousands of dollars in duties on imported components and some finished products since Jan. 1 because Congress let legislation expire that suspended tariffs on hundreds of imported products. The bill, known as the Miscellaneous Tariff Bill, must be renewed by Congress periodically and is meant to help domestic manufacturers compete by giving them tariff breaks on components such as yarns and fibers, or footwear, that are no longer made in the U.S. and must be imported. The 2006 duty suspension bill expired at the end of2009 and the new bill would extend the tariff breaks through 2012.

“This legislation will bring direct and measurable benefits to our economy through job creation and the continuation of well-priced quality products,” said Kevin Burke, president and chief executive officer of the American Apparel & Footwear Association, who called on the president to sign it quickly. “Along with our thousands of employees and our millions of consumers, the U.S. apparel and footwear industry stands to benefit from today’s Senate action and President Obama’s eventual signature.”

A key component of the bill is a retroactive provision that will provide full or partial refunds to companies on duties paid on all covered products since January.

Textile executives applauded the legislation because it would reinstate the majority of duty suspensions for rayon fiber imports and add several new duty breaks for acrylic fibers.

“We’re terribly relieved that this has been done,” said David Trumbull, vice president of trade at the National Textile Association. “Companies took money from other things they might have invested in, like new equipment or worker training, and paid higher duties, while waiting for the government to make them whole, so they really lost the time value of that money.”

Footwear executives had concerns about the new bill because some of the imports received higher duties than in the past.

According to the law, duty breaks in each category cannot amount to a total loss in tariff revenue to the U.S. government of more than $500,000 a year. If trade grows in a given category, lawmakers increase the duties to bring the overall tariff revenue loss back under the cap.

Several hiking boot and shoe imports will see an increase in the duties in the new bill because the volume of imports reached the cap. On the positive side, the measure would still provide many duty reductions on certain imported footwear categories.

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