September 11, 2013 1:04 pm
Have you ever noticed that thin layer of felt on the bottom of a pair of Converse sneakers? It gets torn up almost immediately, of course, as you walk on the shoes. So, why is it there in the first place? It turns out that that felt is there not for functional reasons, but for economic ones—shoes with fuzzy soles are taxed less when imported than those with rubber ones.
Jeff Steck writes on Gazetc that the difference between importing a fuzzy shoe—like a house slipper—and a rubber one—like a sneaker—can be huge. Changing the shoe material can decrease the tariff from 37.5 percent down to just 3 percent. Steck writes:
To benefit from a lower tariff, it isn’t necessary to cover the entire sole with fabric. According to the inventors, “a classification may be based on the type of material that is present on 50% or more of the bottom surface.” (6,471,491) This explains why the “fabric” fuzz extends mostly around the edges of my shoes, where it can take up a lot of area without interfering too much with the traction of the bare-rubber centers.
This kind of finagling is something Steck calls “tariff engineering,” and it’s not uncommon. Here’s another example from Radiolab of how companies slither past tariff regulations. For Marvel, dolls (which represent humans) and toys (which represent non-humans) are taxed at different rates. Which means Marvel actually went to court to argue why their action X-Men action figures were not human—something a fan of the comic might find a bit strange.
So your X-Men action figures aren’t human, and your Converse sneakers are cute fuzzy house slippers. In other words, tariffs ruin everything.
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