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One of the most important exemptions for the American apparel industry is Item 9802 (formerly 807) under the 1989 Harmonized Tariff Schedule of the United States. This U.S. government regulation allows manufacturers to lower production costs by avoiding most tariff taxes while still taking advantage of foreign low-wage production. Under 9802 rules, fabric is cut in the United States, and the pieces are shipped abroad to be assembled.

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