US: Coalition objects to plan for customs rule change
A coalition of industry associations has been set up to try to prevent a change to a customs rule that is feared likely to cost US businesses and consumers millions of dollars.
The move is in response to a proposal by the US Customs and Border Protection, published in the Federal Register on Thursday (24 January), seeking to eliminate the 'First Sale Rule', a commonly used import valuation methodology.
The First Sale Rule allows a company to base the value of an imported finished-good, for purposes of determining the duty rate, on the cost of the product at the first sale in the supply chain, rather than the value at the point of importation.
This lawful, common method of valuation is utilised by businesses across the spectrum, and could potentially cost industries, and their customers, millions of dollars.
At a time when a recession is already looming, this increased cost of doing business would necessarily be passed on to consumers with inflationary retail costs.
"Americans are already taking a hit on Wall Street," said Kevin M Burke, president and CEO of the American Apparel & Footwear Association (AAFA).
"Now they are going to take an extra hit at the cash register for basic needs, like clothes and shoes, because of this rash decision to overturn 20 years of precedents.
"The economic cost of the Customs' elimination of the First Sale Rule could potentially cancel out any positive economic stimulus plan coming from Capitol Hill."
Burke adds: "With a coalition of industry associations, we will defend the First Sale Rule for our members and their customers."
AAFA is hosting a seminar on First Cost Duty Savings in New York City on 6 February.
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