301 Tariff Update — U.S. Suspends Certain Import Duties

by Chris Mitchell, vice president, global government relations

The U.S. Trade Representative (USTR) has prioritized the review of Section 301 exclusion requests related to the U.S. response to COVID-19. In March, USTR granted approximately 200 separate exclusions primarily covering personal protective equipment products and other medical-care related products.

On March 20, USTR published in the Federal Register a request for comment on additional 301 exclusions necessary to combat COVID-19. The docket for comment will remain open until June 25 and will be extended as appropriate. More information about the process for submitting an exclusion request can be found here.

This week, Senators Tom Carper (D-Del) and Pat Toomey (R-PA) urged USTR to suspend the Section 301 tariffs on Chinese products identified as necessary inputs for the manufacture of medical supplies and equipment. They said that companies “should not be subjected to the lengthy process of submitting tariff exemption requests for each individual input required to make products essential for addressing the ongoing pandemic.”

Suspension of Certain Import Duties
President Trump issued an Executive Order April 19 authorizing temporary relief of the payment of certain duties, interest and fees associated with imported merchandise. The move is designed to provide relief to importers struggling with liquidity issues amid the COVID-19 pandemic. The order calls for 90 days of deferral for regular tariffs only for importers who can establish they are experiencing significant financial hardship related to COVID-19. The deferral does not apply to tariffs imposed for remedial purposes, including Section 232 steel and aluminum tariffs, Section 201 and Section 301 tariffs, or antidumping and countervailing duty tariffs.

The temporary postponement applies to merchandise imported in March or April 2020. CBP (U.S. Customs and Border Protection) will not return deposits of estimated duties, taxes, and fees that have already been paid. CBP will consider an importer to have experienced significant financial hardship if:

1. the importer’s operations are either fully or partially suspended during March 2020 or April 2020 due to orders from a governmental authority limiting commerce, travel, or group meetings due to COVID-19: and
2. the gross receipts of such importer for March 13-31, 2020 or April 2020 are less than 60 percent of the gross receipts for the comparable period in 2019.

CBP guidance clarifies that no interest will accrue – and that no penalty, liquidated damages or other sanctions will be imposed – for the postponed payment of such estimated duties, taxes, and fees during the 90-day deferral period. The Department of Homeland Security published the final rule on April 22. CBP has also published a FAQ.

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