An Explosive Issue: Higher Fireworks Tariffs
WASHINGTON (AP) _ Mickey Mouse is doing a slow burn.
An obscure provision in the General Agreement on Tariffs and Trade, a worldwide pact that took effect last year, more than doubled the tariff on imported fireworks, most of which are made in China.
Now The Walt Disney Co., one of the nation’s biggest user of display fireworks, and a group of family-owned businesses that put on fireworks shows are asking Congress to cut the tariff for fireworks used in displays.
The higher duty costs the industry an estimated $400,000 a year, mere pocket change for Disney. But officials in the industry say the higher cost could scale back traditional July 4 fireworks displays.
``Upwards of 70 percent of the customers of these fireworks companies are states and local governments,″ said Ron Olenick, a lawyer for the American Pyrotechnics Association. Any price increase is typically passed onto taxpayers, he said.
Sen. Larry Pressler, R-S.D., whose state is home to Rich Brothers Fireworks, a major producer of fireworks displays around the Midwest, introduced a bill last week to reduce the tariff. A bill also is pending in the House. Supporters want to attach the tariff cut to one of two trade bills moving through Congress.
Some towns may have to give up their fireworks shows, a ``sad fact for rural communities,″ Pressler lamented.
So far Rich Brothers has not had a town cancel a show because of the increased cost, said President Mike Rich. ``It just means a smaller show.″
The tariff adds 5 percent to the show’s cost, meaning an additional $125 for an average $2,500 display.
The tariff went up after the formula to calculate it changed. Previously the duty was levied on the fireworks’ weight; now its based on value. For consumer fireworks such as firecrackers, bottle rockets and sparklers the duty dropped slightly.