Honduran Socks to Face Tariff, But U.S. Firms Say It's Too Small

The Bush administration said yesterday that it will impose a six-month tariff on socks imported from Honduras in an effort to give domestic manufacturers temporary relief from a surge of imports following the passage of the Central American Free Trade Agreement.

The administration said the 5 percent tariff will take effect on July 1 and last until the end of the year.

Domestic manufacturers complained that the temporary border tax is far short of what is needed. They had sought a much stiffer 13.5 percent tariff lasting three years.

Jim Schollaert, executive director of Made In USA Strategies, which represents many domestic manufacturers, called the administration's action a "pitiful remedy. . . . It's just hard to understand why they would think this was going to do anything."

Honduras is the United States' second largest foreign supplier of cotton socks, after Pakistan and ahead of China.

R. Matthew Priest, the Commerce Department's deputy assistant secretary for textiles and apparel, said the administration's decision marked the first time that the United States has ever put textile tariffs back in place after they had been lifted by a free trade agreement.

The decision to temporarily impose a tariff on Honduran socks comes as President Bush is trying to win congressional approval for three free trade agreements -- with Colombia, Panama and South Korea -- during his final year in office.

He recently submitted the agreement with Colombia to Congress for a vote under fast-track procedures that would have required action within 90 legislative days.

However, House Speaker Nancy Pelosi (D-Calif.) led a successful effort to stop the clock on the process. She argued that Congress should not take up the Colombia pact until it first addresses the economic problems of U.S. families.

Congress approved the Central American Free Trade Agreement (CAFTA) covering Honduras and five other nations after a hard-fought battle in 2005. The deal with Honduras went into effect in April 2006. Imports of cotton socks from that country from January through November of last year rose by 99 percent compared with the same period in 2006.

Lawmakers representing districts with sock manufacturing, including Rep. Robert Aderholt (R-Ala.), had pressed for sock protections since agreeing to support CAFTA in July 2005. The Bush-backed deal passed by just two votes after Aderholt and other House members decided to support it upon getting assurances from Bush that he would not let their textile firms get wiped out. Those lawmakers have since criticized Bush for not doing more to protect the U.S. companies.

In a statement, Aderholt said that he was "deeply disappointed and very frustrated" by the tariff's size and short duration. "I will continue to be a thorn in the side of the administration when it comes to fighting to protect our sock industry and all manufacturing jobs, and I will work hard for more fairness in our trade policy," he said.