WASHINGTON — The National Council of Textile Organizations and 74 U.S. textile companies sent a letter to House and Senate leaders on Tuesday imploring them to pass legislation suspending duties on imports of rayon and acrylic fibers because the unexpected tariffs are threatening their businesses.
This story first appeared in the May 13, 2010 issue of WWD. Subscribe Today.
Congress let legislation expire at the end of the year that suspended duties on millions of dollars worth of certain imported components, including rayon and acrylic fiber — two vital components to U.S. textile producers and yarn spinners. As a result, textile firms and footwear brands and retailers have had to pay tens of thousands of dollars in tariffs since Jan. 1.
Lobbyists are urging Congress to reinstate the duty suspensions before the Memorial Day break, but over four months worth of added costs have taken their toll.
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 that are no longer made in the U.S. and must be imported. Acrylic and rayon fibers are no longer produced in the U.S. and have enjoyed tariff breaks for years, but inaction by Congress to pass a new bill reinstating the duty suspensions has imperiled a wide swath of the beleaguered U.S. textile industry.
“Over the last six months, prices for acrylic fiber have increased 50 percent,” the industry said in the letter. “On top of this, companies are paying full duty at 6 percent on top of this enormous price increase, which means textile mills are losing profit margins. If this situation continues further into 2010, the viability of our mills and workers will be put at risk.”
The letter also said firms using rayon fiber, which has been at a zero duty rate for years under the MTB legislation, are now being taxed 5 to 10 cents per pound of fiber.
“If our industry is forced to absorb duties on imported rayon and acrylic fibers, many of the undersigned companies will be unable to remain competitive and will be forced to exit the market for the product lines that utilize these fibers,” the letter said. “The result is that dozens of plants and thousands of workers across the country will be harmed.”