American brands push for tax refunds as RMG exporters eye order surge

Two major American trade organisations representing textile and apparel brands, retailers and importers have demanded refunds of import taxes following a US Supreme Court ruling that struck down President Donald Trump's sweeping global tariffs.

The American Apparel and Footwear Association (AAFA) and the United States Fashion Industry Association (USFIA) welcomed the Supreme Court decision that invalidated the use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs and mandated refunds of hundreds of billions of dollars collected under the measure.

Meanwhile, garment exporters in Bangladesh expect increased work orders from US buyers, saying the court ruling could improve buyers' purchasing capacity once the import taxes they paid are refunded.

In a statement on Friday, AAFA President and CEO Steve Lamar said, "We are confident in Customs and Border Protection's (CBP's) ability to move quickly and provide clear guidance to American businesses on how to obtain refunds for tariffs that were unlawfully collected."

He added that the CBP's modernised electronic refund process should help expedite repayments and urged the administration to work with Congress and stakeholders before considering any future tariff action.

The AAFA represents apparel, footwear and other sewn-product companies and their suppliers competing in the global market, contributing more than $523 billion annually in US retail sales.

In a separate statement, USFIA President Julia Hughes termed the Supreme Court ruling a "tremendous victory" for American consumers and businesses, noting that fashion brands and retailers already paid some of the highest tariffs on apparel and footwear.

She said that this is a positive step forward to improve affordability and remove the economic uncertainty that has held back many companies from making new investments.

"We call on the Trump Administration to move quickly to develop an efficient and automatic refund process that returns tariff money to the businesses that have paid more than $133 billion in IEEPA tariffs," she added.

USFIA represents textile and apparel brands, retailers, importers, and wholesalers based in the United States and doing business globally.

Talking to the FE, Shovon Islam, managing director of Sparrow Group, said that after the court ruling, American buyers are likely to receive tax refunds, which will improve their financial situation.

Buyers had reduced order volumes following the tariff hikes as the added costs weakened consumer demand and forced them to adjust purchases within their existing budgets, he explained.

Islam added that a subsequent 15 per cent tariff announcement by Trump -- lower than the earlier 19 per cent applied to Bangladesh -- would not create major difficulties for buyers.

He also said Bangladesh could become a preferred destination for US buyers as orders shift from China.

According to US official data, Bangladesh earned $8.20 billion from garment exports to the US, posting 11.75 per cent year-on-year growth despite an overall decline in America's apparel imports.

Munni_fe@yahoo.com