Marketplace public radio | Monday, January 21, 2008
U.S. heels duty-free Honduran socks
Honduras exports enough socks to the U.S. for President Bush to want to impose a large tax on the products. Dan Grech reports the decision to impose duties on Honduran socks will be a lifeline to U.S. sock makers.
TEXT OF STORY
Scott Jagow: Moving along this morning: A trade war has erupted between the U.S. and Honduras. The two countries are fighting over . . . socks. President Bush says Honduran socks are causing serious damage to American sock-makers, so he wants to impose a hefty import tax on socks from Honduras. Dan Grech has more from our America’s Desk at WLRN.
Dan Grech: In 2005, the U.S. signed a free trade agreement with five nations in Central America, including Honduras. Textile manufacturers in Honduras took full advantage. They started sending us socks duty free. In fact, exports jumped from 14.6 million pairs in 2006 to over 28 million last year.
Lloyd Wood: That’s a tremendous surge. The government had to act in this situation.
That’s Lloyd Wood with the American Manufacturing Trade Action Coalition. He says the Bush Administration’s decision to slap duties onto Honduran socks will be a lifeline to struggling U.S. sock makers.
Wood: It will give some breathing space for domestic manufacturers to try to compete with the low-cost labor from Honduras.
Honduras is expected to lodge a formal complaint, and the U.S. has up to 90 days to respond.
I’m Dan Grech for Marketplace.