Pricey blue jeans: It's war between the US and EU
In a trade spat, the European Union has more than tripled its tariff on high-end women's denim made in America.
Next month, the U.S. and the European Union are expected to start talks on the Transatlantic Trade and Investment Partnership (TTIP). If successful, TTIP is supposed to boost trade between the two economies by further opening markets and investment.
But a trade dispute over expensive, American-made blue jeans is showing just how difficult it might be to turn the TTIP into a reality.
On May 1, the EU announced that tariffs on women's denim trousers will rise from 12% to 38%. Many of those high-end blue jeans are made in Southern California. As the Los Angeles Times reports, most garden-variety, relatively low-cost blue jeans are now made outside of the U.S., due to lower manufacturing and labor costs.
The U.S. Trade Representative's office points out that the EU is America's largest export market, with $459 billion in U.S. goods and services exported to EU countries, supporting about 2.4 million American jobs.
According to the office of Tom Travis, a Miami-based lawyer who specializes in international trade and customs law, the tariff on jeans and other U.S. exports is the latest chapter in sanctions authorized by the World Trade Organization as retaliation for the U.S. failure to fully comply with a WTO ruling against the Continued Dumping and Subsidy Offset Act of 2000. That act, also known as the Byrd Amendment, allowed the U.S. to collect additional duties on goods considered "unfairly traded."
Even though the Byrd Amendment was repealed in late 2005, its effects continue. "The immediate issue for U.S. jeans manufacturers affected by this action is to figure out how to preserve their EU export business through this crisis," Travis said in a recent press statement. "We are working closely with both our EU and U.S. offices to formulate both short-term tactical and long-term strategic options."
The U.S. premium women's jeans market had been hurt by the recession, but according to Women's Wear Daily it was rebounding this year. WWD quotes Travis' firm, which represents many blue jean companies in Southern California, as showing January and February jean exports to the EU growing by 19.5% to a value of $7.4 million.
The California Trade Association, an L.A.-based group, is calling on lawmakers to put pressure on the EU to reverse the tariff. Ilse Metchek, the association's president, says the Los Angeles County unemployment rate stands at 10.2% and that the area can't afford to lose more jobs.
"The retaliation is easy to do on the apparel industry," Metchek told the L.A. Times. "We have no lobby in Washington."
"On May 1, the EU announced that tariffs on women's denim trousers
will rise from 12% to 38%. Many of those high-end blue jeans are made
in Southern California. As the reports, most garden-
variety, relatively low-cost blue jeans are now made outside of the U.S.,
due to lower manufacturing and labor costs."
There are two basic issues that immediately leap to mind:
US made products are grossly over-priced; and the EU is not only injuring the US with the exorbitantly escalated tariffs but they are cutting their own collective throat as well.
Just proves one thing... greed is global.
While I really could care less about women's high end jeans issues this simply exemplifies the typical pushing and shoving that goes on in the international business world. In many ways it represents a kind of microcosm of international politics. In this particular article, if I am reading it right, it seems that we kind of failed to hold up our end of a previous agreement called the "Continued Dumping and Subsidy Offset Act of 2000." Instead we kind of bullied our way around it to some extent. Therefore the European Union is taking this opportunity to retaliate for that action on our part.
The EU is usually pretty good about taking care of business at home which is something that we really need to do a better job of is you ask me. The original free trade agreements were poorly conceived and even more poorly managed. As a result much of our middle class have lost their jobs as industries took advantage of the loop holes and moved off shore for lower labor costs and fewer environmental restrictions. We seem to be really good at shooting ourselves in the foot in business as well as in politics. LOL
With most American companies having items manufactured in places like China and Thailand I really didn't think there was too much of anything that was still made in this country. Besides cars almost everything else seems to be made everywhere else but here.
Sooner or later, the issues with trade with Europe will seem like small potatoes! Our stock market is being artificially propped up with the Feds QE! Most, if not all, of the increase in values can be directly tied to this process. I see the stock market going up for the next year or so while the suckers sink their life savings, their 401k's, and their pension funds into the market. Then the market will collapse, the liberal 1%ers will have cashed in their money, and the average guy will take it in the shorts! Then the government will come in and "save" our 401k's by nationalizing them and tying it to Social Security. Next, the government will "bail out" the destroyed pension funds by nationalizing them "for our own good"! Then the hard working guy will lose all of their assets and the government will keep hyper-inflation from happening because of the trillions of dollars that will just go "poof" into thin air (and in the pockets of the supporters of our near-socialist, regime!)
Don't even think that just because you have gold or silver you are safe! In the past the government has made ownership of precious metals illegal for the average citizen. They will, once again, take your assets and give you back worthless dollars. Welcome to Obama's America!
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 added just over a point, holding its weekly gain at 1.0% while the Nasdaq lost 0.4%.
The major averages began the day on an upbeat note, but relinquished their opening gains during the first 90 minutes of action. The early sentiment was boosted by a better-than-expected nonfarm payrolls report for February (175K versus Briefing.com consensus 163K), but a closer look into the report suggested that ... More
More Market News
The solid report comes a month after the retailer closed all of its Canadian operations.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'