Pressure Building for New Relief on China Tariffs

With the end of the year fast approaching many importers that rely on current China tariff exemptions are facing the imminent loss of relief. Remaining active USTR exclusions will expire on December 31, 2020. As a result, Congressional pressure is mounting for the U.S. Trade Representative (USTR) to allow for an automatic extension of relief during this period of transition.

Seventy-five members of the House of Representatives are asking the USTR to automatically extend all currently active product exclusions. These members made the request on a bipartisan basis in a letter expressly noting that some of the expiring provisions cover critical items like personal protective gear, cleaning supplies, and important healthcare items which will now be subject to additional tariffs when these items are needed most.

The letter does not specify how long the extension of relief should be granted for; nor does the letter address what should occur for exclusions that have already recently expired but also cover critical items.

The members also acknowledge that businesses need more time to realistically relocate supply chains out of China and such efforts may have been impossible considering the current pandemic. The full text of the Congressional letter can be found here.

This latest Congressional effort builds upon prior efforts to support a USTR extension of Section 301 tariff exclusions. In July of this year, bipartisan legislation was introduced under H.R. 7665 calling for a one-year extension of relief from Section 301 tariffs by extending product exclusions currently in effect. It called upon the USTR to offer relief unless it found the merchandise to be strategically important to Chinese industrial programs or if the agency concluded the relief would cause severe harm to the United States.

At this point, it remains unclear whether the USTR will act in response to the Congressional signals for extended relief. All importers currently relying on USTR exclusions should monitor imports to ensure entry prior to the end of the year. Should entry delays occur that push entry dates into 2021, tariff relief will no longer be available.

Should you have any questions concerning USTR relief, please do not hesitate to contact one of the trade professionals here.