As discussed in class and in the Stigler reading, The Theory of Economic Regulation, industries seek to manipulate the powers of the state to obtain favorable regulation. Through monetary subsidies, control over entry, and price-fixing, various regulations serve to benefit domestic industries. Protective tariffs serve as an example of entry controls (or barriers to entry). In researching different protective tariffs, both pertinent and outdated, I came across the protective shoe tariff, which is definitely on the archaic side of the spectrum.
Implemented via the Smoot-Hawley Tariff Act of 1930, the regulation protected domestic footwear producers. Yet even throughout the 20th century, as domestic production declined and footwear production moved to foreign sites, the tariff remained. In 2011, The Tax Foundation estimated that "only 1% of US-consumed footwear is produced domestically." Up to 40% of the price of a pair of shoes can be attributed to the tariff. As AEI described cohesively, the "US has imposed protective shoe tariffs on Americans for decades, even with no domestic shoe industry to protect."
A few years ago, senators introduced legislation in an attempt to decrease the tax burden that consumers pay for shoes. Termed the Affordable Footwear Act, the legislation would eliminate "$800 million in duties on children's and low cost shoes out of the 2 billion in total duties collected on imported shoes in 2010". The Act never made it to vote. Stigler would be especially unhappy with this tariff - not only was the tariff designed to benefit the domestic shoe industry, but it persists today with barely any domestic shoe industry left to benefit.
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