[APRIL 3 UPDATE] U.S. lawmakers of both parties in the House and the Senate, including House Minority Leader Kevin McCarthy (R-CA) and Sens. Pat Toomey (R-PA) and Dianne Feinstein (D-CA), have urged the Trump Administration to suspend tariff collections for at least 90 days to assist businesses that are hurting from the economic crisis caused by the COVID-19 pandemic. U.S. Customs and Border Protection (CBP) said earlier in March that it would accept applications from companies to delay duty payments, but now says it will no longer accept those requests. The bipartisan group of lawmakers sent a letter dated March 26, 2020 to Treasury Secretary Steven Mnuchin, urging him to issue a directive to CBP to defer all tariffs for at least 90 days, or until the crisis passes. If CBP defers all tariffs for at least 90 days, it could provide struggling businesses with much needed cash-on-hand to continue functioning and paying employees.
However, during the regular evening Coronavirus Task Force press conference on Tuesday March 31, 2020, Trump indicated that he is not amenable to any abatement of duties during the health crisis, asserting that the tariffs are being paid for by countries like China rather than U.S. businesses and consumers. While admitting that “there is nothing wrong with doing it”, he also stated that since no executive order has been presented to him, the White House has not taken any action. However, it is important to note that even if deferral measures are approved, CBP is expected to only limit the deferral to regular duties, taxes, and fees. The Trump Administration has been considering an executive order that would defer tariff payments on some imports, but would not outright cancel the duties. According to the New York Times, the most recent discussions in the administration have included a 30 day referral, rather than a 90 day one. This would mean that special tariffs and duties, such as Section 232 tariffs on steel and aluminum, Section 301 tariffs on imports from China, and antidumping and countervailing duties may or may not be deferred.
As a follow up to Husch Blackwell’s post earlier this week, White House Economic Advisor Larry Kudlow stated in an April 3, 2020 interview that any duty deferrals are not likely and that the administration has decided not to defer duties at this time, because such an action was “too complicated” and “might send the wrong signals.”
Husch Blackwell is closely monitoring U.S. trade actions and will provide updates as more information becomes available. If your company has any questions about possible import duty deferrals, please contact our International Trade and Supply Chain team.