Tracking Surfboards

The product codes of the Harmonized Tariff Schedule (HTS) of the United States help track the importation of almost everything under the sun–from nuclear fissile materials to polo balls. There’s a code for just about any product you can think of–even snowboards have their own classification (9506.11.40.10).

The history of that particular code is–not surprisingly–rather recent. Back in 1996 domestic snowboard manufacturers were growing increasingly restless about the number of snowboards coming in from China, where cheap labor provided significant price advantages. The domestic manufacturers and Snowsports Industries America (SIA) thought quantifying those imports using the HTS would be the first step in addressing their impact to the market.

Any of this sound familiar? If it doesn’t now, it may soon if the Board Builders task force is successful. The SIMA-backed task force is supporting the efforts of Lost Cofounder Matt Biolos to petition the government to create a specific surfboard provision in the HTS.

“One of the problems is there’s no classification for imported surfboards, says task force head and longtime board builder Bill Bahne. “They come in classified with water toys, pool-toy floaties, and scuba gear.

According to Biolos, the tariff classification will make it easier to enlist the help of the U.S. government to protect domestic board builders. “If you look through history, America started out as a manufacturing country and has turned into a service country. The manufacturing has gone overseas in all kinds of industries.

“The industries that are strong and united in the U.S. have used the laws of the government to protect themselves, he continues. “They’ve petitioned customs and our government to create things like import duties, country-of-origin markings, and quotas to protect themselves.

Biolos says the surfboard manufacturing industry has never been unified or able to defend itself in this manner. “In the meantime, our government has enacted more and more restrictions and laws for us, the domestic manufacturer, to abide by, he says. “We have regulations for the environment, fire, insurance, and workmen’s compensation. We have all these rules and laws that we have to follow. It makes our business harder and we get smaller margins.

“I’m {also} in the garment industry, he continues. “When I see a pair of my boardshorts come in from China, I know we had to pay a 30-percent duty on them put in place to protect the domestic industry. It’s called fair trade.

All this made Biolos wonder what rules and regulations the imported surfboard manufacturers have to follow, and with the help of a lawyer he’s started a multi-month quest to educate himself on those regulations–a process that continues today.

Biolos says he discovered that imported surfboards come into the U.S. with zero duty. “I don’t think this is widely known in our industry, he says. He also learned that the government has laws set up about country-of-origin markings. “Basically every product imported into the country is supposed to be–and I quote–‘Permanently and indelibly marked to the best ability of that product.’ That’s not happening. Most imported surfboards are coming in with a little Mylar sticker usually placed on the tail stump of the board. It’s very hard to find. The sticker is about the same size as one you’d see on a coffee cup. Proportionately, it’s way too small and it’s not indelible.

Another area of interest for Biolos and his lawyer are the laws regarding domestic references on imported products: “For example, you can’t start making wrenches in China and call the company ‘Detroit Wrench Company’ unless you put the country-of-origin marking in an equal size to the domestic reference.

Biolos says that if the laws were being followed, imported surfboards would be less attractive to surfers. “What’s happening now is that surfers don’t have to carry that stigma {of buying an imported surfboard} with them, he says. “They can take the sticker off. If it was done correctly–like it is with all the toys you grew up with–it would be stamped or embossed. The law says it has to be there permanently, so when they guy is walking down the beach he carries with him the stigma that he bought a board made in China by people who don’t surf. That’s how the law reads. Unfortunately, getting the law enforced isn’t quite as easy.

According to Bahne and Biolos, that’s why getting surfboards added to the HTS with its own line item is so important. “Since 9/11 and the terrorism threat, the customs department–which is overworked and understaffed–has had bigger problems to deal with, says Biolos. “They’re worried about terrorism and nukes coming in. So things will slip on by unless you go out there and push them, and tell them how the domestic industry is getting pounded.

Biolos insists that he isn’t against industrial trade progress. Nor does he think that enforcing existing laws will stem the tide of imports. “At this point we’re looking for fairness, he says. “The domestic manufacturers have all these rules and laws we have to follow to make boards here, and there are rules already in place to protect us as a domestic industry–they just have to be enforced. The customs people acknowledged to me that we are a small but vital industry.

“For most things in our world, the influx of imported goods just seems to be the way things are going, sums up Biolos. “But there are a lot of us who think surfboards are special. They’re a handmade sporting-goods product. There’s a huge industry of clothing, shoes, sunglasses, and more built upon the foundation of these handmade surfboards. They were invented and the construction was mastered right here in California for the most part. I think that’s worth saving.

TransWorld SURF Business will update this story as it develops.