ROBERT SIEGEL, HOST:
Now a holiday story about a tariff dispute. And if anyone could come up with such a story it would be our Planet Money team. Here are Robert Smith and Jacob Goldstein.
JACOB GOLDSTEIN, BYLINE: Robert Smith, what are you wearing?
ROBERT SMITH, BYLINE: I am wearing red pants, a red overcoat, a black belt. I'm dressed as Santa.
GOLDSTEIN: What am I wearing?
SMITH: You are also wearing a Santa suit (laughter), something I never thought I'd see, Mr. Goldstein.
GOLDSTEIN: Me neither, but we are surrounded by - oh, I don't know - 1,000 people dressed as Santa.
Robert and I are at SantaCon, this big, rolling Santa-themed party in New York City. We're here because this is what that tariff dispute is over - Santa suits. Looking around, all these suits look pretty much the same. But according to the U.S. government, they are not. Santa suits, the government says, fall into two very different categories. Category one - flimsy, the cheap ones.
UNIDENTIFIED MAN #1: I'm trying to get my belt to work.
GOLDSTEIN: You're having belt trouble?
UNIDENTIFIED MAN #1: Yes.
SMITH: Do you need our help with this, sir?
UNIDENTIFIED MAN #1: No, no. I'm OK. It was like a $14 Santa costume.
GOLDSTEIN: U.S. customs looks at this cheap $14 suit and says, this is a festive article. It's in the same part of the tariff code as holiday decorations and party favors. A suit like this you can import duty-free, no tax. But then there's a second category of Santa suits - nice ones, well-made.
UNIDENTIFIED MAN #2: It's got a hood over it, long sleeves, some embroidering here.
GOLDSTEIN: Yeah, the embroidery is beautiful - gold embroidery. And, look, this looks like a real belt.
UNIDENTIFIED MAN #2: Oh, yeah.
GOLDSTEIN: U.S. customs looks at a suit like this and says, wait, this is so nice, it's clothes. And to import clothes, you do have to pay a tariff, you do have to pay a tax.
Marc Beige thinks this is ridiculous. He, not surprisingly, is a big costume importer. He's suing the government, saying, come on, Santa suits are not clothes.
MARC BEIGE: This is the epitome of a festive article. I mean, when else, other than Christmas, are you going to wear this?
GOLDSTEIN: I mean, it's nice. I could put on this red, fur jacket.
BEIGE: Right, but when is the last time you went around dressed as a Santa Claus (laughter)?
GOLDSTEIN: So where should Santa suits go in the tariff? I called up an expert - Douglas Irwin, a professor at Dartmouth. And he seemed to have every tariff code ever written sitting there in his office. He says the tariff on clothes goes way back. It's part of the second law ever passed by the U.S. Congress. The other category, festive articles, he had to dig for that one. Eventually he got to the tariff code from 1922.
DOUG IRWIN: Oh, I think festooning is festive articles.
IRWIN: Here's what it says, (reading) doll heads, toy marbles, toy games, toy containers, toy favors, toy souvenirs, garlands, festooning, and Christmas tree decorations.
GOLDSTEIN: Nowhere in that list does it say Santa suits or costumes. But if you read through the part of the tariff code that covers clothes, that also does not mention Santa suits or costumes. The tariff code's more than 3,000 pages long. It lists thousands of things. But you could never list everything, and costumes are just one of the things that's not in there. Customs declined to comment for this story, but the government itself doesn't seem to be sure where costumes belong. It's changed its mind over the years about what goes where. And Marc Beige, the importer suing the government, he's changed his mind, too.
You were on the other side then, right?
GOLDSTEIN: Back in the '90s, Marc Beige was not importing costumes. He was making them here, in the United States. That's why he used to be on the other side. Now Beige and a group of costume importers are trying to end this fight once and for all. They're trying to get Congress to pass a law saying costumes are festive articles, not clothes. If passed, the law would make that 3,000-page tariff code one paragraph longer. Jacob Goldstein, NPR News. Transcript provided by NPR, Copyright NPR.