On April 18, the White House announced it would allow some companies to delay payment of import tariffs due to economic hardship triggered by the new coronavirus.
The following day, the Treasury Department, in conjunction with U.S. Customs and Border Protection (CBP), issued a temporary final rule to allow companies to delay for 90 days the payment of tariffs on certain goods coming into the U.S. from March 13, 2020, through April 30, 2020.
U.S. importers seeking a tariff-payment delay must “demonstrate a significant financial hardship” and must have operations that are “fully or partially suspended during March or April 2020 due to orders from a competent governmental authority limiting commerce, travel, or group meetings.” Companies must also show a 60% decline in gross receipts to qualify, and the losses must result from partial or full closure due to government order.
The importer does not need to file documentation with CBP to be eligible for this relief but must maintain documentation as part of its records establishing that it meets the requirements for relief. CBP may also conduct a review of the documentation at a future date to ensure compliance with the requirements. Importers must make sure their merchandise is eligible for this deferral. This temporary postponement does not apply to any consumption entry, or withdrawal from warehouse, for entries of merchandise that fall under Sections 201 (safeguard tariffs), 232 (national security tariffs on steel and aluminum materials), or 301 (China tariffs) of various trade remedy statutes, or which attract countervailing and antidumping duties.
Tag: Tariff
“Phase One” Signed of U.S. and China Trade Agreement
On January 15, 2020, the U.S. and China signed a “phase one” trade agreement previously announced by the United States Trade Representative (USTR) in December 2019. The complete text of the trade agreement can be read here.
When the “phase one” trade agreement was first announced, the U.S. had suspended the additional 15-percent tariff on List 4B goods imported from China that was scheduled to take effect on December 15, 2019. The formal text of the “phase one” trade agreement does not directly address any further tariff reductions. However, the USTR is expected to publish a separate Federal Register notice on reduction of tariffs on List 4A goods from 15 percent to 7.5 percent later this week, and the tariff reduction is scheduled to take effect on February 14, 2020. Further, the U.S. will maintain the 25-percent tariffs currently in place on List 1, 2, and 3 goods imported from China totaling approximately $370 billion.
According to the “phase one” trade agreement, China will increase its imports of certain U.S. goods worth no less than $200 billion by the end of 2021, along with commitments in other areas including intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.
Beyond this limited truce, no further developments in the ongoing trade negotiations between China and the U.S. are expected this coming year due to November’s impending U.S. presidential election.