It's a scary time for Halloween costume importers and retailers.
For years, imported costumes made from cloth moved freely through US borders without being subject to tariffs and import quotas. Now, these goods, known as nondurable costumes, are at the center of a legal battle that's sending shivers through the costume industry.
The fight is unlikely to have much effect on consumers this Halloween. But next year, prices might rise as much as 50 percent if a federal appeals court upholds a lower court ruling that these goods should be treated like regular apparel, subjecting them to imports and duties of up to 30 percent.
The dispute grows out of a case brought by New York-based Rubie's Costume Co, which sews most of its costumes in the US but found it was getting slapped with duties of anywhere from 10 percent to 16 percent on fabric it imported.
In what Rubie's calls an attempt to gain "an even playing field," the company persuaded a judge from the US Court of International Trade in February to reclassify costumes made of nondurable cloth as "fancy dress" apparel, subjecting them to tighter rules. In June, the Justice Department appealed the case, and now the decision lies with the US Appeals Court in Washington.
"We think it is unfair that someone who makes use of China labor can escape duty on everything," said Marc Beige, president of Rubie's.
But, Rubie's rivals contend the company is just trying to hurt importers.
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