Fashion’s Washington Agenda
With fashion struggling through supply shortfalls, crowded ports and supply chain troubles that have been exasperated by COVID-19, the industry’s Washington contingent has zeroed in on the mega infrastructure bill working its way through Congress.
It’s a big-ticket item that could bring $16 billion to upgrade ports that are ill-equipped for today’s larger cargo ships and funnel other funds to bridges and roads in need of a refresh.
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That won’t help replenish the supply of computer components or raw materials that have been disrupted by the pandemic, but the iron is hot now and lobbyists are doing what they can to help make it easier to move goods around the country in the future.
But not every issue has the benefit of bipartisan support and multibillion dollar plans of action and — as usual — fashion’s agenda in Washington is broad.
Here, a look at some of the other topics and themes lobbyists are working on.
COVID-19
“COVID-19 continues to guide the industry’s priorities in Washington, and is likely to remain in this role for the foreseeable future,” said Stephen Lamar, chief executive officer of the American Apparel & Footwear Association. “Whether that’s pursuing solutions to the shipping crisis that is hampering our economic recovery, or advocating for the distribution of excess vaccines to protect our industry’s workers.
“On the vaccine front, we have been very public about calling on the Biden administration to share our nation’s excess vaccine supply with partner countries in our supply chain,” Lamar said. “While much more is needed to be done, we have been encouraged by the administration’s actions to date and are continuing to highlight the needs within our partner countries. At the same time, we are working with our partners in other countries to ensure that industry workers quickly receive vaccines and are able to safely remain at work, following applicable public health guidance — e.g., social distancing, masks — to help sustain and support economic recovery.”
Tariffs
While President Biden has avoided the kind of over-the-top geopolitical rhetoric of his predecessor, parts of Donald Trump’s love of trade wars have endured into the new administration — tariffs on Chinese imports.
“The fashion industry is one of the most heavily taxed segments, by way of tariffs,” said Brian Dodge, president of the Retail Industry Leaders Association. “The [Biden] administration is approaching China with a much different strategy, one that is more diplomatic.”
But the Trump era tariffs linger. The average tariff on Chinese imports to the U.S. stands at about 19 percent, according to the Peterson Institute for International Economics.
Dodge described the duties paid to allow goods to enter the country as “taxes paid by American consumers,” since retailers have to absorb the costs and ultimately pass some portion of them along to shoppers.
As the Biden administration engages with China, tariffs could come back on the table, and industry lobbyists will be pushing for reductions.
Counterfeits/Organized Retail Crime
Retailers are also looking for some backup from Washington as they square off with online marketplaces, where they say counterfeits and criminals are taking a bite out of their businesses.
RILA’s Dodge said the Amazons and eBays of the world are not properly being held accountable for the goods sold on their marketplaces.
In some instances, retailers are getting hit twice, with organized gangs stealing goods from their stores and then setting up shop online.
“You used to have to sell stuff out of the trunk of your car, in a flea market, in a way that would raise the antenna of most honest people,” said Dodge, noting that goods sold through online platforms can look legit to shoppers even if they are stolen or fake.
RILA is supporting the INFORM Consumers Act, which was introduced in the Senate in March and would require marketplaces to get a verifiable name and address for all sellers.
Taxes
One of President Trump’s biggest legislative achievements was the 2017 tax reform package that cut the corporate tax rate to 21 percent from 35 percent — a rate that was considered to be the highest in the industrial world.
Now with the government spending big to support the economy and planning to keep spending — including the effort to update the nation’s infrastructure — President Biden has proposed raising the corporate tax rate back up to 28 percent.
“That would be a 33 percent increase in the tax rate for the corporate tax payer,” noted David French senior vice president of government relations at the National Retail Federation. “Since retailers pay at the highest effective rates in the economy, the burden of that tax increase would be felt most heavily on those retail businesses.”
Personal Protective Equipment
The textile industry, which is so often at odds with the importers, has its own Beltway agenda.
One big item for U.S. textile makers that has grown out of the pandemic is the push to rebuild a permanent domestic supply chain for personal protective equipment.
Kim Glas, president and CEO of the National Council of Textile Organizations, said: “The U.S. manufacturing industry has produced over a billion lifesaving PPE and other medical products over the last year, as NCTO members retooled production chains in response to the nation’s needs. We must ensure that taxpayer dollars are utilized to bolster the federal purchase of American-made PPE and our domestic industrial base at a time when PPE orders for our industry have diminished.
“We will continue to urge the government to adopt a domestic procurement law similar to the Berry Amendment to ensure the federal government prioritizes purchases of PPE and other textile based medical supplies that are made by 100 percent U.S. labor from 100 percent U.S. content,” Glas said.
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