Introduction

Tariff policy has lain in comfortable darkness for many years. But this month, the Bush administration's 30 percent duty on imported steel returned it to the spotlight. There is good reason to hope the pool of light broadens beyond steel, because a look at today's U.S. tariff system reveals something surprising and uncomfortable: it has become steeply tilted against the poor.

Decades of trade negotiations have brought U.S. tariffs on average below 2 percent. This, however, masks the fact that on consumer goods tariffs remain high -- often equaling and at times higher than the new tariffs on steel. This is above all true for two types of products -- clothes and shoes -- where tariffs are almost eight times the overall average. Making up only about 6.5 percent of imports, these products bring in nearly half of America's $20 billion in annual tariff revenue.

Furthermore, tariffs within these categories are usually higher on cheap goods than luxuries. Women's underwear is an example: Tariffs on man-made fiber panties are over 16 percent, but on silk panties they are 2.4 percent and set to fall even lower. Similar disparities appear in baby clothes, sneakers, men's shirts, spoons, drinking glasses, and a vast range of other household goods. Thus, the poor -- above all, single mothers who spend more of their income on clothing than other families -- lose far more of their income to tariffs than wealthy or middle-class consumers.

Finally, clothes are the type of labor-intensive goods in which most industrial development begins. So Cambodia, Bangladesh, and other impoverished Asian countries, specializing almost wholly in these products, face effective tariff rates as much as 30 times above those applied to wealthy economies like Japan or the European Union. One need not adopt the theory popular in India -- of a deliberate conspiracy against the poor -- to consider this a remarkable inequity.

Americans seeking to reform such policies have at least three attractive options:

• a simple decision to treat tariffs as taxes;
• new market access programs for the least developed nations, ending the exclusion of shoes and clothes from existing U.S. duty-free programs; or, and ideally,
• a renewed focus on raising U.S. living standards as a principal trade policy goal, and thus use of the new WTO negotiating Round to eliminate tariffs on shoes, clothes and other household goods worldwide.

Any of these could bring higher living standards to the poor at home, and new opportunities for some of the world's poorest countries. The challenge is not one of analysis, but simply political will -- because the facts are there for all to see, and they are rather devastating.