Schumer: Unwarranted Tariff Could Force Orleans & Madison County Businesses to Shut Their Doors, Putting Dozens Out of Work - Urges US Customs to Reverse Decision Imposing Steep Tariffs on Worn Clothing from Canada

Press Release

Out of the Blue, U.S. Customs Has Slapped a 32% Tariff On Breutex LLC's and Rick's Rags' Raw Material Imports

Breutex and Rick's Now Owe Import Duties on Previously Duty-Free Imports Due to CBP Reclassification, While Canadian Competitors Have Free Access to U.S. Markets

Schumer Calls on Customs to Lift Unjustified Tariff Immediately, Before Extra Costs Force Companies to Lay Off Workers or Shut Down

Today, U.S. Senator Charles E. Schumer wrote a letter to U.S. Customs and Border Protection (CBP) urging corrective action on behalf of two upstate New York rag manufacturing companies, Breutex LLC and Rick's Rags, that are being hit with a 32% duty on imported worn clothing from Canada. The bulk worn clothing imports are being classified by CBP as wearable apparel, which carries a 32% tariff. Worn clothing imported in bulk normally enters the United States duty-free. In 2007, Schumer worked successfully with Customs to correct the same tariff misclassification problem. Recently, a 32% tariff has been put back in place by CBP despite the fact the companies continue to import worn clothing in bulk from Canada which they then process into rags for sale in the United States. Schumer wants Customs to correct the misclassification, as the duty threatens to drive both companies out of business and put Upstate New Yorkers out of work.

"It is simply unfair for CBP to slap a crushing 32% tariff on Breutex and Rick's Rags imports out of the clear blue sky, especially after this battle has already been fought and won in favor of New York rag manufacturing companies," said Schumer. "For years both Breutex and Rick's have employed Upstate New Yorkers by taking unusable worn clothing and making it into rags, fulfilling a unique service and acting as an economic engine in the region. This unwarranted tariff classification decision could shut the entire operation down, as every penny extra they must pay on raw materials drastically eats into their profitability and threatens to drive them to lay off workers or go out of business."

Breutex and Rick's Rags buy worn clothing in bulk from Canada, and recycle, cut and process the worn clothing into wiping rags, towels, and cloths for various industrial sectors like furniture refinishing, automotive detailing, industrial cleaning, hotels & restaurants, and more. U.S. Customs and Border Protection recently reclassified these materials under a catch-all apparel category (6110.30.3059) which carries 32 percent rate of duty. The additional, unanticipated duty costs for raw materials threaten the economic viability of these small businesses, and Schumer urged CBP to immediately correct this misclassification, to ensure that Breutex and Rick's are not force to lay off workers or go out of business.

Breutex LLC, employs between 8 to 15 employees at their Medina rag manufacturing and cutting facility. Breutex purchases their raw material from Weisman Exports in Canada, the costs of which have increased by 32% due to this unjustified tariff. Schumer states that every extra penny that Breutex must pay on raw materials drastically minimizes their profitability and threatens to drive them to lay off workers or go out of business.

Established in 1984, Rick's Rags in Canastota produces over 30 different grades of cleaning rags for industrial and residential use. The company has 16 full time employees. A large part of the company's bulk raw material comes from recycling several tons of waste material that would otherwise be landfilled. Rick's Rags has seen a great deal of growth in recent years, but the recently imposed 32% import duty is eating into their profits. Rick's Rags also uses Weisman Exports in Canada as their supplier, and joins Breutex in pursuing the removal of this unjustified tariff.

Schumer also notes that while Breutex's and Rick's rag materials imports are now subject to a 32% duty, their Canadian competitors have free access to the U.S. market because there is no U.S. duty on imported cut and finished rags from Canada. This means that Breutex's and Rick's Canadian competitors can sell their rags in the U.S. without a duty, but these U.S. companies are being charged 32% to import raw materials from Canada.

Source