Fashionistas ‘across the pond’ could soon be paying less for genuine ‘Made in the USA’ women’s blue jeans.
Los Angeles-based Hudson Clothing LLC has received word from the UK’s H.M. Revenue & Customs that its women’s blue jeans are exempt from a 200 percent retaliatory EU tariff increase imposed last spring.
The international law firm of Sandler, Travis & Rosenberg represented Hudson in the matter with attorney Elise Shibles crafting a legal argument asserting that the blue jeans in question fall under a tariff provision not covered by the increased tax.
The across-the-board move by the EU that raised the import tax from 12 percent to 38 percent “should not have been applied to Hudson’s jeans,” said Shibles. “We were able to convince H.M. Revenue & Customs that the jeans should fall under the tariff classification for cotton women’s trousers other than denim or corduroy and, as such, should be exempt from the increased tariff.”
Hudson jeans, she said, “are definitely made of denim as the term is used in the apparel industry but they don’t fall within the legal definition of denim within the Harmonized Tariff Schedule.”
The jeans were classified in the EU under the correct tariff code, which means they are not the type of garments subject to the tax hike, Shibles added.
Hudson Clothing agreed to have its name used for the classification determination and produced clothing samples. Also participating in the effort were Paige Denim, Koral Los Angeles, and True Religion.
Tom Travis, a managing partner at the San Francisco-headquartered law firm, said the ruling “could bode well” for other manufacturers whose imports into the EU were subjected to the 38 percent retaliatory tariff.
The UK ruling, he said, “is a step in the right direction in fighting the retaliatory tariffs imposed by the EU last spring,“ noting that the firm is currently working with Hudson and other US West Coast denim apparel makers to seek refunds for overpayment of taxes and obtain rulings on other items that should have been exempt from the tax.
Last April, US blue jeans manufacturers were jolted by the announcement of the tariff hike, which took effect May 1.
The tariff was a continuation of sanctions authorized by the World Trade Organization in retaliation for the US failure to fully comply with a WTO ruling against the Continued Dumping and Subsidy Offset Act of 2000.
Commonly referred to as the Byrd Amendment, this law allowed the US to distribute the additional duties collected on imports of unfairly traded goods to the US industries affected by such practice. The law was found to be a violation of WTO rules and despite a repeal of the law its effects were allowed to continue.
As a result, the WTO allows other countries to raise tariffs on goods imported from the US compensatory with the amount of distributions under the Byrd Amendment in the previous year.