United States: COVID-19 - Tariff-Relief Opportunities for US Importers

In brief

The U.S. government is now considering multiple possible avenues for tariff relief for companies importing goods for use in combatting the COVID-19 pandemic.


Contents

The U.S. government is now considering multiple possible avenues for tariff relief for companies importing goods for use in combatting the COVID-19 pandemic.  There are two potential U.S. tariff-relief opportunities that businesses importing into the U.S. should be aware of:

  1. Section 301 China Tariff Relief - On 25 March 2020, the U.S. Trade Representative published a Federal Register notice soliciting requests for relief from the China Section 301 tariffs for goods needed to respond to the COVID-19 outbreak.  Requests for relief should be submitted for particular products, and must "explain precisely how the product relates to the response to the COVID–19 outbreak."  The USTR contemplates granting exclusions for products which are used (1) to treat COVID-19, (2) to limit the outbreak, or (3) in the production of needed medical care products.  The deadline for submitting requests for relief is 25 June 2020.  This opportunity to request Section 301 tariff relief comes after previous action by the USTR to voluntarily suspend Section 301 tariff on a range of medical products.
  2. Possible Customs Duty Relief - On 6 April 2020, the chairmen of the House Ways and Means and Senate Finance committees formally requested that the USITC prepare a report that identifies "imported goods related to the response to COVID-19" of any origin, including tariff classification and all applicable rates of duty (including the general MFN duty rate, and any special or additional rates of duty), "so as to assist the Committees and USTR in proposing or taking appropriate and responsive actions."  The USITC is requested to deliver its report (in electronic, data-sortable format) to the committees by 30 April 2020, though it is permitted to update the data on the USITC website through 30 June 2020.

The letter from the Ways & Means and Finance chairmen does not specify every purpose for which this tariff information is being collected, only that it will be used to assist in "proposing or taking appropriate and responsive actions."  That said, it clearly contemplates some form of tariff relief — minimally including Congressional support for Section 301 tariff relief, and raises the possibility of customs duty relief.  The focus of the USITC report is broad, encompassing "imported goods related to the response to COVID-19", and comes days after the WTO issued a report calling for trade liberalization in goods useful to combat COVID-19.

In view of the foregoing, we recommend that any company importing goods related to the COVID-19 response which are subject to duties (of any type) engage with the USITC to ensure that such goods are encompassed by the USITC's forthcoming report.  If you have any questions, please reach out to the below contacts.

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