The Black Diamond Cirque 22 ski vest (a very sweet pack) is made in the Philippines.
From the THR Trade Winds Desk: A peek at some complex trade rules that may impact the cost of ski packs and the puffies you stuff in there.
We prefer to ski and climb. But understanding how the sweet ski sac on your back involves geopolitics and trade can be informative, too. This headline came across last week’s news feed: “Black Diamond Testifies Before the House Ways and Means Committee in support of Several of the Industry’s Trade Priorities.”
I know—not exactly the headline that should have gotten my attention. Around the same time, headlines roared Kelly Slater saved himself by making a mid-tube recovery. No doubt, some headlines swooned about line-sending in South America. I digress. However, Black Diamond Equipment in the news catches my eye, even more so when testifying at the highest levels of government.
Black Diamond Vice President for Operations, Fabian Garza, represented BD and members of the Outdoor Industry OIA) of America in lobbying for, among other things, the renewal of the Generalized Systems of Preferences (GSP).
Let’s make a few things clear upfront. Companies like BD and pretty much any outdoor brand are interested in the GSP. The GSP is the heady title for the details wrapped up in a trade agreement. The Congressional Research Services states the GSP “provides nonreciprocal, duty-free tariff treatment to certain products imported to the United States from designated beneficiary developing countries (BDCs).”
Practically speaking, this means, for example, that a backpack manufactured in Vietnam can be imported to the US with zero to no tariffs. The GSP, in principle, keeps costs down for the exporter, importer, and finally, you, the consumer. The GSP expired on Dec. 31, 2020, and has not been renewed. Thus, Garza’s presence in D.C. speaking on behalf of BD and the OIA.
In his testimony to the House Ways and Means Committee, Garza claims since the GSP expiration in 2020, the outdoor industry has been burdened with an additional $1.65 billion in tariffs. (That’s a lot of chalk bags.) Among a few ways an outdoor company can handle those extra costs is to absorb the cost internally and not increase prices, or the costs of increased tariffs are passed onto the customer. Let’s also assume that there’s some middle ground: the company can absorb some costs and transfer some to the end consumer, which is you and me. Further, the OIA, and by extension, companies like BD, are asking for retroactively reauthorizing the GSP. That means companies hit with a tariff since the GSP’s expiration—that otherwise would have been negated under the GSP—can apply for a refund from the U.S. Customs and Border Protection.
A Snapshot: Most backpacks we consider technical sacs fall under “Travel, sports and similar bags with outer surface of man-made fibers.” According to the Congressional Reporting Service, $616.7 million of these products (HTS # 4202. 92. 31) were imported from GSP qualifying countries in 2021. With the expired GSP, these products were hit with a 17.6% tariff rate. Had the GSP been renewed, the products would likely have been imported duty-free.
The premise behind the GSP has underpinnings in helping less developed countries grow their manufacturing sectors and moving manufacturing, and supply chains generally, away from China. All this may come as no surprise if you have cataloged the country of origin for your outdoor apparel and luggage/backpacks for the past decade or so.
Patagonia's DAS parka is the made in Vietnam varietal.
Made in Bangladesh: the Arc'teryx Proton Lightweight Hoody.
N=3 in the kitchen. With just three items grabbed within eyesight, we’ve got three countries that used to benefit from preferred duty-free tariff treatment…and three outdoor brands, too. Fun fact, Garza noted BD imports products from over 20 countries.
- Patagonia Das JkT=Vietnam
- Arc’teryx Proton Lightweight Hoody=Bangladesh
- Black Diamond Cirque 22 ski vest=Philippines.
Across the board, GSP-qualifying imports account for a relatively small percentage of total U.S. imports. Anecdotal evidence suggests that, for the most part, the gear we like to use for outdoor pursuits is made overseas, which means an overall decline in domestic production. Aside from an assortment of boutique manufacturers in the outdoor space, your “Made in the XYZ,” tag on your softgoods likely illustrates this point.
The past few years have witnessed spikes in inflation. Buying stuff costs more nowadays. Compound inflation with the lapse of the GSP, and there’s some truth in this: if you think you are paying more for some outdoor gear, you are.
The issues involved with the GSP and its renewal get more complex. And Garza raises this point. The GSP was written to protect domestic manufacturing. The document includes provisions that create an export ceiling for places like Bangladesh, Vietnam, and the Philippines. These provisions are referred to as CNLs, or competitive needs limitations. Think of it as a cap on exports from, say, Vietnam when considering the value of backpacks they can export and Outdoor Company X can import annually.
Garza and others claim the CNLs restrict these countries from expanding manufacturing capacity and force outdoor companies to source from China when bumping up against those thresholds. Further, as a general trend, any intention of returning manufacturing to the U.S. has yet to manifest.
Whew. What about keeping it simple? We all want a sweet ski/riding pack that isn’t too fiddly, is produced ethically considering labor practices, and sources materials from reputable suppliers keen on best environmental practices. That problem, we think, is easy to solve. Find a pack that works for you and buy from a brand whose business practices align with your values. Hopefully, that keeps it simple. But the pricing mechanisms and geopolitical wrangling behind the scenes mean you’re carrying the weight of Washington and international trade intrigue on your back, too. And speaking of light and fast—maybe your wallet feels a bit lighter because it might be, whether the pack is made from some 60-D nylon Cordura or snazzy as *&&^!! Dyneema.
