The Bush Administration Will Levy Taxes On Socks In Honduras

On Friday, the Bush administration claimed that the United States would levy a 6 month tariff on socks imported from Honduras to ease the difficulties faced by domestic producers due to the surge in imports caused by the Central American Free Trade Agreement.

The Bush administration said that 5% tariffs were levied in July 1st, until the end of the year.

Domestic enterprises complain that temporary taxation is far from enough.

They asked for a 13.5% high tariff for 3 years.

Honduras is the second largest foreign source country for exporting socks to the United States, ranking before Pakistan and before China.

Matt Priest, Secretary General of the Ministry of Commerce in charge of textiles and clothing, said that tariff was abolished after the entry into force of the free trade agreement. This is the first time that the United States has levying taxes on textiles.

The US government has decided to temporarily raise Honduras's socks duty because President Bush is trying to get Congress to agree to three free trade agreements to be signed in his last year, free trade agreements with Columbia, Panama and South Korea.

After intense struggle, Congress approved the Central American Free Trade Agreement in 2005, covering Honduras and five other countries.

The agreement with Honduras came into effect in April 2006.

Socks imported from Honduras from January to November last year increased by 99% over the same period in 2006.

The tariff on socks in Honduras was 4.4% before the free trade agreement abolished tariffs.

Republican congressman Aderholt said that the tax decision can only be extended to December 31st. After that, some temporary quotas for Chinese clothing imports will be canceled, including socks.

He said that Honduras's competitive advantage could not be lost to China, allowing Honduras to use American raw materials, including socks, and cancel tariffs on Honduras's imports.

He said our textile and garment industry in the northern hemisphere is becoming more and more integrated.

We must unite to face the ever expanding competition from Asia.