Tariffs remain intact on Chinese goods for COVID-19 response

In an odd example of unintended consequences, the U.S. government still is collecting as much as 25% tariffs from Chinese manufacturers on face masks and other protective wear for U.S. health care workers on the front lines of fighting the COVID-19 pandemic.

Records show that in the fine print of Chinese-American trade tariffs, there are numerous examples of so-called “Section 301 tariffs” being charged on medical equipment and supplies from China. Here is a list of some of them, their tariff number and amount of tariff, as per the United States Trade Representative (USTR) office:

• COVID-19 Diagnostic Test instruments and apparatus (HS 9027.80) – List 1 – 25%;
• Textile face-masks, without a replaceable filter or mechanical parts, including surgical masks and disposable face-masks made of non-woven textiles. (HS 6307.90) List 4A—7.5%;
• Protective spectacles and goggles (HS 9004.90) List 4A—7.5%;
• Other rubber gloves. (HS 4015.19) List 4A—7.5%;
• Textile gloves that are not knitted or crocheted (HS 6216.00) List 4A—7.5%;
• Disposable hair nets (HS 6505.00) List 4A—7.5%;
• Other protective garments of textiles of rubberized textile fabrics or woven fabrics that are impregnated, coated, covered or laminated (HS 6210.40) List 4A—7.5%;
• Digital thermometers, or infrared thermometers for placing on the forehead. (HS 9025.19) List 2—25%;
• Alcohol solution - Undenatured, containing by volume 80% or more ethyl alcohol (HS 2207.10) List 3—25%;
• Alcohol solution - Undenatured, 75% ethyl alcohol (HS 2208.90) List 4A—7.5%;
• Hand sanitizer (HS 3808.94) List 3—25%;
• Other disinfectant preparations (HS 3808.94) List 3—25%;
• Hydrogen peroxide in bulk (HS 2847.00) List 3—25%;
• Hydrogen peroxide put up in disinfectant preparations for cleaning surfaces (HS 3808.94) List 3—25%;
• Other chemical disinfectants (HS 3808.94) List 3—25%;
• Computed tomography (CT) scanners (HS 9022.12) List 1—25%; and
• Extracorporeal membrane oxygenation (ECMO) (HS 9018.90) List 1—25%

American trade experts and others are lobbying the U.S. Trade Representative (USTR) to exclude these personal protective equipment (PPE) items during the pandemic. The USTR has announced exclusion processes to help with the medical response to COVID-19, at least through June 26. The USTR did not respond to requests for comment.

But each domestic importer must comment specifically and identify the particular product of concern and explain precisely how the product relates to the response to the COVID–19 outbreak, according to the Federal Register. But if a tariff is excluded, it's to the benefit of all importers, experts say. That means that if a tariff is excluded, it is completely excluded and Company A and Company B will both benefit from the exclusion.

What the U.S. didn't do is remove the Section Tariffs from items that can help the medical response to COVID-19. “Yes, the Chinese-made PPEs are an issue – we've had our lobbying groups pressing the USTR to stop the Section Tariffs rather than just allowing companies to request exclusions,” said Beth Pride, president of BPE Global, which specializes in export management and compliance programs, import compliance and deemed exports.

There are four lists and the COVID relief items are sprinkled throughout the lists. But Pride said to request an exclusion is complex and time-consuming. Basically, she said, importers have to know which list you are on and then go to that list's exclusions request.

The Washington Post has reported U.S. officials are examining proposals for punishing China for its handling of the pandemic. Some administration officials have discussed having the U.S. cancel part of its debt obligations to China. Asked about that option, President Donald Trump said recently, “I could do the same thing but even for more money (by) just putting on tariffs.”

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