PPI | Trade Fact of the Week | April 30, 2003
Gold-Plated Forks are Duty-Free, but Cheap Stainless Steel Ones Have 10 Percent Tariffs
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Tariffs on cheap stainless steel forks:
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10% - 20% |
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Tariffs on gold-plated forks:
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0% |
Tableware illustrates a sad fact about American trade policy: it hits poor people harder than rich people. A small example comes from silverware. Americans imported nearly three billion pieces last year -- 545 million full sets, plus 200-300 million loose spoons, forks, and table knives. At about an ounce apiece, this adds up to about 90,000 tons of metal -- about the weight of an aircraft carrier. The tariff system applies to these goods much as it does to shoes and shirts: cheap goods for family restaurants and poor or middle-class families makes up about 97% of imports and high tariffs, but the relatively few elite businesses and wealthy families who buy sterling silver or gold-plated silver pay low tariffs or none at all.
Americans imported about 250,000 silver spoons last year (counting both solid sterling and silver-handled); these carry a 3.3% tariff, slightly above the average for all goods. But tariffs are 14% on the hundreds of millions of stainless steel spoons imported at costs of 25 cents or less apiece. The disparity for knives and forks is sometimes even greater, as most cheap stainless steel forks have tariffs ranging from 10% to 20%, while silver-handled forks have a 2.7% tariff, and gold- or silver-plated forks none at all. In effect, a four-star hotel importing a silver spoon at about $30 apiece pays about a dollar per spoon in tariffs; a family restaurant buying $30 worth of cheap spoons pays about four dollars in tariffs. Trade agreements are providing little relief -- only about 3% of silverware comes duty-free through NAFTA or the duty-free programs for developing countries. The top sources of precious-metal silverware are France, the United Kingdom, and Italy, while cheaper goods come mainly from China, Korea, Taiwan, and Indonesia.
Similar inequities appear in plates and drinking cups. For example, a set of china plates costing $56 or less has a 26% tariff, but a set costing $200 or more only 6%. Drinking glass tariffs have the sharpest skew of all, jumping from 3% on leaded-crystal beer mugs to 29.4% on cheap drinking glasses costing 30 cents or less.
PPI shows why the U.S. tariff system hits single moms hardest: www.ppionline.org/ppi_ci.cfm?knlgAreaID=108 &subsecID=900010&contentID=250828
The United States calls for elimination of tariffs worldwide:
www.ustr.gov/new/Zero_Tariff.htm
Some other countries also have inequitable spoon policies: EU tariffs are 4.7% on silver-plated silverware, 2% on solid silver or gold, and 8.5% on stainless steel, and Canadian tariffs jump from 7% for expensive spoons to 11% for cheap ones. Tariffs for the Philippines, China and India are equal for all types of spoons, but very high at 12%, 18% and 30% respectively. Australia and Japan set good examples with 5% and 4.6% tariffs on expensive and cheap silverware alike. The U.S. International Trade Collection has links for the U.S. tariff schedule and schedules worldwide -- see Chapter 82, section 8215 for stainless steel silverware and Chapter 71, section 7114 for precious metal.
The U.S. tariff schedule:
http://dataweb.usitc.gov/scripts/tariff/toc.html
Links to international tariff schedules:
http://dataweb.usitc.gov/scripts/worldtariffs.htm
Utterly mysterious fact: the United States seems to be the only country to discriminate by the length of silverware. If a fork is 27 centimeters or longer, the rate is 8.5% plus half a cent per fork; at 26.9 cm or less, it jumps to 15.8% plus nine-tenths of a cent per fork. Does anyone know why?
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