Introduced by US Senators Sheldon Whitehouse (D-RI) and Bill Cassidy (R-LA), the proposed law seeks to require duties be calculated based on “the last sale of the merchandise occurring before exportation to the United States”.
It will replace the current process that allows importers to declare the value based on an earlier transaction within a multi-tier supply chain.
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Industry groups argue that the existing system often results in artificially low values for duty assessment and facilitates trade-based money laundering.
NCTO president and CEO Kim Glas said: “NCTO and the US textile industry strongly support the Last Sale Valuation Act, a bill that would eliminate a harmful CBP rule that significantly lowers duties paid by importers on textile and apparel goods and disadvantages US textile manufacturers in favour of countries that often employ predatory trade practices and fail to provide reciprocal market access.
“We sincerely thank Sens. Bill Cassidy (R-LA) and Sheldon Whitehouse (D-RI) for their leadership on this bill. Closing this loophole will help level the playing field, bolster the US textile industry, and spur more onshoring and investment here and in our Western Hemisphere.”
Besides NCTO, the legislation has received endorsements from the Rhode Island Textile Innovation Network, Rethink Trade, and Coalition for a Prosperous America.
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By GlobalDataCurrently, the “first sale” rule permits large multinational companies to report lower values on goods entering US commerce by using offshore intra-company transfers or other early-stage transactions as the declared value.
Critics contend this practice disadvantages domestic manufacturers and can obscure illicit financial activity.
The Last Sale Valuation Act aims to ensure that duty assessments reflect the actual transaction between foreign sellers and US importers before goods enter US markets. Supporters believe this adjustment would create more equitable conditions for small businesses and domestic producers.
Senators Whitehouse and Cassidy presented the bipartisan bill as a means to address what they describe as a longstanding loophole in customs regulations impacting the textile supply chain from fibre production through finished products.
