U.S. bill to remove outdoor apparel tariff gains steam

But at least one NH firm says ‘it will hurt us’

After nearly a decade of effort, representatives of the outdoor apparel industry have finally moved forward the US OUTDOOR Act, which, they hope, will eliminate tariffs on imported high-performance recreational apparel.

That should please New Hampshire companies like Timberland as well as both of New Hampshire’s U.S. senators and the commissioner of the state Department of Resources and Economic Development. They contend that the narrow tariff carve-out would benefit the industry and their consumers, and hurt hardly anyone, since there is not much domestic apparel manufacturing to protect anymore.

But it does not please Robert Nadler, president of Ragged Mountain Equipment Inc., whose Intervale firm makes outdoor apparel.

“It will hurt us,” he said. “It certainly won’t help us.”

Ragged Mountain manufactures special lightweight textiles to clothe outdoor adventurers in extreme conditions. Most of that manufacturing has gone overseas, despite tariffs designed to protect domestic industry.

In fact, there is such little domestic production left that tariffs are now “outdated,” contends the Outdoor Industry Association, which is seeking to eliminate the tariffs, which average about 14 percent for a subset of the textile industry technically known as “recreational performance apparel.”

The US OUTDOOR Act (officially the US Optimal Use of Trade to Develop Outerwear and Outdoor Recreation Act) spends most of its 9,000-plus words defining and classifying the category, in an attempt to narrow its definition so it won’t upset the run-of-the-mill textile manufacturers.

And – perhaps to attract environmentalists – the act would tax imports 1.5 percent over the next decade to create a Sustainable Textile and Apparel Research Fund controlled by the industry to develop environmentally sustainable technologies.

‘Small voices’

In an April 16 press release U.S. Sen. Kelly Ayotte, lead Republican sponsor of the bill (joining Sen. Jeanne Shaheen, one of the original co-sponsors of the bill when it was first introduced eight years ago), echoed industry claims that “recreational performance apparel produced in the U.S. makes up less than 1 percent of the total recreational performance market.”

The Outdoor Industry Association goes even further in a fact sheet claiming there is “no commercially viable production of recreational performance outerwear in the United States.”

Try telling that to Nadler, who considers himself part of the 1 percent.

“We fit the definition,” he said. “There are many manufacturers still left. We just have small voices.”

Ragged Mountain now has only 16 workers involved in that manufacturing, half the number it employed a decade ago.  Another half-dozen work in its retail store, where its products often lose out to overseas competitors, despite the tariff.

“Those products are made by paying 75 cents an hour without benefits, compared to $14 an hour plus benefits in the U.S.,” said Nadler. “How could you possibly compete with that?”

He said he had a bit of a comeback in the last year, thanks partly to an improving economy, and partly because of interest in buying American-made products.

But the tariff bill could undermine some of that, he said.  

Federal requirement

The state Department of Resources and Economic Development says it is looking at the bigger picture – the larger outdoor recreational industry in New Hampshire.

According to DRED, if you include everything – the spending at local stores to fees paid at the state parks – the industry supports some $4.2 billion in consumer spending in New Hampshire, supporting some 49,000 jobs and paying some $1.2 billion in wages and salaries.

Much of that is not actually spending on outdoor apparel of course, but as DRED Commissioner Jeffrey Rose explained, “we are very dependent on outdoor recreation and the advanced technical textile companies are very worthy of the support of this bipartisan legislation.”

Timberland alone employs about 360 people in New Hampshire, employees who mainly do R&D and marketing. The company’s manufacturing is all done overseas, so the company has to pay the tariff to import that back into the U.S.

“Simply put, these tariffs on recreational performance apparel are outdated and no longer warranted, given how the market has evolved,” said Kristine Marvin, vice president and general counsel for Timberland. “This bill will result in reduced consumer prices for the apparel they need to enjoy their time in the outdoors – like the waterproof jackets Timberland has offered for years. In addition, the funds realized will be funneled into R&D that will identify more sustainable textiles and materials innovations.”

Cam Brensinger, CEO of Dover-based NEMO Equipment Inc., wanted to manufacture its equipment – primarily tents – in the United States, but it simply could not compete. It wasn’t just the cost of labor, he said, it was finding people with either the skills or the interest to work at it.

“Young Americans do not want to grow up and sit at sewing machines all day,” he said. 

Indeed, the main reason there is any manufacturing in the United States has less to do with tariffs and more to do with a federal requirement that military contract purchases contain a certain percentage of domestically made supplies. Indeed, that requirement has caused NEMO to buy more supplies here once it started landing military contracts.

Brensinger said he would make more of his textiles in the United States. “It’s becoming fashionable in the market, but you can’t buy the lightweight textile that we need. The lightest we are buying is out of Korea and Japan.”

NEMO won’t be directly helped by the act, since it covers apparel not equipment, but he still supports it because it helps the industry in general, making it more affordable “for young people who might want to get off their couches and go hiking.”

He also said he hopes that tariff reductions might spread to outdoor equipment. If so, he would be able to lower prices for customers, though he said he wouldn’t mind pocketing “a point or two” to improve his own company’s margin.

That this might be the first step is also among the worries of domestic textile manufacturers. And there is some skepticism, expressed by Nadler, that tariff relief will translate into lower prices for consumers, instead being passed on to shareholders.

Whether the bill is the first or last step, it is taking an awful long time.

Rich Harper, the Outdoor Industry Association lobbyist, is encouraged that Senate Finance Committee voted a portion of the bill out of committee as an amendment to a trade bill involving Africa, Haiti and other underdeveloped countries. “This is further than it has ever gone before,” he said.  “It’s a good step forward. It’s a decade-plus opportunity.” 

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