The long-awaited administration decision to defer some tariffs for some importers drew a lukewarm response from business groups, in part because the action itself is so limited.
The decision, announced Sunday, will allow importers who can document a significant financial hardship to defer payment of duties, tariffs and fees for 90 days, but it covers only products imported between March 1 and April 30. The president cited the COVID-19 pandemic as the reason for the executive order.
The National Retail Federation welcomed the action but also said that it had hoped for more.
“NRF has pressed for duty deferral for all duties, including those for trade remedies,” Mary McGinty, vice president for communications, said in an e-mail. “While we appreciate this limited duty deferral, we hope the Administration will continue to evaluate and expand all options to help companies that are facing serious liquidity issues at this time.”
Technology importers also are looking for greater relief.
“While we welcome the president’s action to alleviate tariff burdens on some U.S. industry and consumers as a means to support the U.S. economic and public health response to the outbreak, we urge more expansive action for the more than $370 billion of goods subject to Section 301 tariffs,” said Jason Oxman, president of the Information Technology Industry Council. “Deferring payment on these tariffs would provide much-needed flexibility and facilitate the delivery of assets to U.S. healthcare providers, companies and consumers during the current public health crisis.”
Not only did executive action exclude any products from China covered by sanctions under Section 301 of the 1974 trade law, but it also excluded products covered by Section 201 duties on solar cells and modules and washers, and steel and aluminum covered by national security-based tariffs.
In addition, the temporary final rule excludes a broad range of goods that are subject to duties under anti-dumping and countervailing duty orders administered by the Commerce Department, which cover a wide range of goods, including kitchen cabinets, mattresses and truck tires.
Importers can qualify if they can show their operations were suspended during a period of March or during April by a government order limiting commerce in the effort to contain the pandemic, and their revenue during that period fell to 60 percent or less than revenue during the comparable period of 2019.
A group of Democratic congressmen had written Larry Kudlow, director of the National Economic Council, on April 18 requesting action after repeated press reports that the administration was considering some form of tariff relief as businesses struggle with the economic fallout of COVID-19.
“It is time for this Administration to step up to the plate on this issue. With the next monthly duty payments coming due this Tuesday April 21st, we ask that you take action immediately and provide a clear and detailed explanation about what you plan to do,” wrote Reps. Ron Kind, D-Wis., Suzan DelBene, D-Wash., Lizzie Fletcher, D-Texas, and Gregory W. Meeks, D-N.Y.
The administration measure also drew criticism on foreign policy grounds.
“Chinese manufacturers, particularly those who are dependent on exports, are suffering right now because of the downturn on a global basis,” said Craig Allen, president of the U.S-China Business Council.
Yet trade relief that excludes most China-origin goods actually adds to the pressure to source from other countries, he added.
“This is not a friendly act to China, that’s for sure,” Allen said.