LHCA’s concession will be hard to implement, unfortunately
Industry body the Leather and Hide Council of America (LHCA) has shared details of an “accommodation” it lobbied for and secured in the recent new US tariff announcements.
Included in the executive orders on new tariffs that President Donald Trump signed on April 2 is an acceptance that imports containing material that originated in the US can receive a special consideration.
“What that means,” LHCA said, “is that leather products containing more than 20% US hides or skins by value would be eligible for a tax exemption.”
It said it was still working with the US customs authorities “to understand and confirm the process and documentation requirements” for imported leather articles to qualify for the exemption.
LHCA has explained that the exemption would only apply to the US content in an imported product. If 20% of the value of an imported pair of shoes, for example, is from leather made from a hide from the US, those shoes can be imported into the US with a 20% discount on any tariff payable.
However, because hide prices are at their lowest in many years, it is difficult to see how imported leather footwear could be cheap enough for the leather to represent 20% of the total value.
An article in the April-May issue of World Leather will suggest that maximum cost that such a pair of shoes could have on being imported into the US would be $7.50.
LHCA said it was aware that the April 2 announcement, and the imposition on the US of reciprocal tariffs by other countries, would represent challenges to its member companies and their overseas trading partners.
“We are working tirelessly with our foreign association counterparts and the US government to encourage a way forward to minimise the impact on the global leather industry,” LHCA said.
