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.

By Bruce Kennedy May 6, 2013 7:27AM

Image: Money in pocket (© Tom Grill/Corbis)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Even though the Byrd Amendment was repealed in late 2005, its effects continue.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."


More on moneyNOW

121Comments
May 6, 2013 9:19AM
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what comes around goes around. raise our tariff and stop being everyone's dumping ground . if our tariff and import duty was as much as most of the worlds. we wouldn't have to worry about jobs. even our own manufactures would have to consider making stuff here.
May 6, 2013 9:40AM
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When a country raises tariff on product made in America it the issue of cutting your nose to spite your face. We have helped many countries for years. And this is the payment we get. I say stop all imports from coming here and put America back to work.
May 6, 2013 10:20AM
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wake  up you dumb people   stop  buying oveseas items of any thing> support the usa
May 6, 2013 9:38AM
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well its called regulation like in 1973 gas and food was regulated along with a lot of other things now we are raped at ever turn in life now we cant make money we cant have a job we cant have a home we cant have health  coverage all we can do is work like dogs for the few rich players in the usa as we the people are left out in the cold the players in DC give them self razes ever time they turn around but they cant give us jobs and basics we need to live a full life ........
May 6, 2013 9:39AM
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Wouldn't the more significant issue be-- with European Unemployment as high as it is... why aren't European countries demanding their own designer brands to produce their products THERE again? Los Angeles denim is pretty crappy stuff after 2-3 washings and only a psychopath shells out $200 or more for a label (because the quality certainly isn't there).
May 6, 2013 9:20AM
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"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.

 

May 6, 2013 9:50AM
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I buy my blue jeans from Texas Jeans. Good quality and the price is right.
May 6, 2013 10:29AM
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EU is falling like a house of cards anyway. How sustainable is it when the have nations are continually bailing out the have not nations?
May 6, 2013 11:42AM
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Hard buy American when most products are coming from third world countries. Some people say it cost to much manufacture products here. Well the end result of that philosophy is less work for us, fewer jobs and companies are allowed to take their business outside our boarders. Therefore less jobs means less spending. Which relates to conditions that exist now. You can't expect people to spend with low paying jobs. They are just getting by. This whole country will be working for Wal-Mart before to long. That'll stimulate the economy. Even tax breaks are given, to American manufactures, they still chose to go outside the U.S.. There are fewer taxes, if any, ,manufactures get strapped with. While the rest of use go broke from the residual effect. Wonder why Social Security is failing. Well you have to have everyone participate including these blood sucking Anti-American companies. It's not rocket science less income less spending and so forth. Oh, by the way, when you have no health insurance where do you go? The ER. and who pay's for that? Well the taxpayers. And the tax base is shrinking to lack of a decent job, or no job at all.  The great old American way. And don't forget to send your kids off to fight for this so called free enterprise we stand up for. And hopefully your child survives through a war. Just saying.
May 6, 2013 12:06PM
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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

May 6, 2013 10:38AM
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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.

May 6, 2013 11:04AM
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Why do you put this crap out,....we citizens of the U.S. have no say so in our government.
May 6, 2013 12:00PM
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Ah the good old days. I remember when gas was 25 cents a gallon.
May 6, 2013 10:20AM
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Any government that spends trillions falsely building its' economy and yet does nothing to protect that nations jobs/revenue flow from moral and ecological stances that unequal the playing field, such as trading partners that pay nothing for eco related, taxes, socialized citizen related expenses, workplace mandates, is serving multiple masters or just plain retarded! TARIFFS are necessary to maintain ANY reason to augment our economy, if there is no way to compete, then there is no way to maintain a revenue stream and no need to pour money into an economy and labor market that is slowly failing because of thoroughly fixable and completely obvious reasons!
May 6, 2013 11:59AM
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Texas Jeans made in the USA.
I try when I can to help keep another American employed.
Or  Prison Blue jeans made in Oregon to help offset costs to house the prisoners who make them.
May 6, 2013 11:36AM
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Easily solved - simply don't buy them!!! What's wrong with buying American?  )or are there denim makers still in US? Have all the CEOs shipped them off shore so they can line there pockets???

May 6, 2013 11:53AM
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The report leaves out home much we import from the EU. Exports are important to the US. But we import billions more than we export.
May 6, 2013 11:38AM
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There is currently a price war on every product the US offers, jeans food, water, gas, clothes everything!!!!!!!!!!!!!
May 6, 2013 10:29AM
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Well, basic 'Supply & Demand"  Economics dictate for the most part the price of a good.  In this case if people stopped buying these jeans you would probably see the price go down.
May 6, 2013 8:04PM
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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!

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