What women’s underwear tells us about trade system
Ahead of Valentine’s
Day, trade researcher Ed Gresser engaged in the most romantic of exercises: He looked up tariffs on underwear. (No judgment. We all have hobbies.) Lo and behold, he found that ladies’ undergarments are systematically taxed at higher rates than men’s.
The average U.S. tariff rate on men’s underwear is 11.5%. The average rate on women’s undies, on the other hand? It’s a few points higher, at 15.5%. All things considered — including transportation costs, sales taxes, marketing, different retailer markups — Gresser estimates that on average the U.S. tariff system adds about $1.10 to the cost of each pair of women’s underwear, compared with 75 cents for men’s.
In almost any other context, women’s rights groups would be livid. Yet when it comes to the U.S. trade system, such discrimination gets a pass.
Unfairness on underwear reflects a broader, bizarrely antilady pattern in our trade system: With a few exceptions, men’s apparel items are more lightly tariffed than women’s.
When people talk about “pink taxes,” they don’t typically mean literal taxes on women’s products. The term refers to companies charging higher markups on women’s products than on very similar men’s products (such as razors, deodorant, body wash). Some recent studies have cast doubt on the widespread existence of this company-enforced price-discrimination, but nonetheless indignant calls for gender-based price parity are common in the media, NGO reports and occasionally even Capitol Hill.
But what of the “pink tax” that is literally mandated by U.S. trade laws — that is, higher import tax charged by the U.S. government on ladies’ clothes and other items? Few seem to recognize its existence, let alone organize petitions calling for its elimination.
Incidentally, gender is not the only dimension on which U.S. trade policies are systemically discriminatory. The even starker pattern Gresser (a former U.S. trade official, now a vice president at the Progressive Policy Institute) and other researchers have identified over the years involves disparate impacts by income class.
For example, let’s return to the item of the day, your spicy Valentine’s Day gift: U.S. tariffs on underwear also vary considerably depending on how high- or low-end the material is. Fancier silk products are by far the most lightly taxed (2.1% for women’s panties and 0.9% for male boxers and briefs); middle-class cotton options have slightly higher tariffs (7.6% for women and 7.4% for men); and working-class polyesters are most heavily taxed (16% for women, 14.9% for men).
This regressive tariff pattern exists across many categories. “Almost invariably, things made of cheap, simple materials meant for mass markets are taxed more heavily than those made for elite, richer buyers,” Gresser says.
Luxurious cashmere sweaters face lower tariffs than do acrylic ones. Likewise with snakeskin or leather handbags vs. canvas purses. In a metaphor that’s almost too on the nose, even silver spoons get preferential tax treatment, when compared with their cheaper stainless steel counterparts.
Gresser says it doesn’t generally work this way in other countries: U.S. trade barriers appear unusually sexist and regressive, and have been for many, many decades.
It’s not exactly clear why the U.S. trade system is so rigged against women and the working class, but the patterns seem to date back to lobbying from earlier eras.
In the garment industry, U.S. manufacturers might have felt most threatened by foreign competition on more labor-intensive products, which were disproportionately women’s products. (“Women’s clothing often has more lace and frills and adornments on it than men’s, so men’s was more suited toward machine production,” Gresser explains.)
When it comes to home goods — aristocratic silver and silk vs. blue-collar stainless steel and polyester — companies might have likewise been more worried about competing on price for the lower-end options, since working-class customers are more price-sensitive. So dating as far back as the 1930s and 1940s, they lobbied for the sharpest tariffs on cheap goods.
In the end, these protectionist policies proved ineffective at shielding U.S. companies from competition; garment manufacturing for both genders, as well as production for common home goods, almost entirely left the United States anyway. But the tariffs as they were crafted decades ago continue anyway, with their same class and gender biases. The U.S. tariff system is pretty broadly regressive in other ways, too, given that lower-income consumers spend a higher share of their budgets on products subject to import duties.
So why aren’t feminists and anti-poverty advocates up in arms? Perhaps because there’s such limited understanding of how the U.S. trade system works. Like so many features of government, it is cloaked in complexity. Plus, those who usually fight for more equitable treatment might be loath to take on the political allies who push protectionism.
Maybe someday we’ll build a trade system that’s friendlier to women and the poor. Now that would be romantic.