Trade Compliance Flash: USTR Considers Tariff Relief for Products Relevant to the Medical Response to COVID-19
In a March 25, 2020 Federal Register Notice, the Office of the United States Trade Representative (USTR) announced it would accept comments from the public as to whether it should lift Section 301 tariffs on medical-care products needed to address the COVID-19 outbreak.
The Notice invites interested parties to (1) specifically identify the product at issue and (2) "explain precisely how the product relates to the COVID-19 outbreak." For example, comments may discuss whether a product is "directly used to treat COVID-19 or to limit the outbreak, and/or whether the product is used in the production of needed medical-care products." In addition, comments should include the applicable 10-digit subheading of the Harmonized Tariff Schedule of the United States (HTSUS) for the product of concern and a description of the product's physical characteristics, including functionality and principal use. Comments are due on June 25, 2020 and should be submitted via www.regulations.gov (docket number USTR-2020-0014).
USTR has already granted tariff relief to certain protective equipment and other medical-care related products – including medical masks, examination gloves, antiseptic wipes, and ice bags – pursuant to its Section 301 product-specific tariff exclusion process. These exclusions were announced by USTR via Federal Register Notice on March 10, March 16, March 17, and March 25, 2020.
- A potentially broad opportunity for Section 301 tariff relief. While it is unclear how USTR will interpret whether a product of concern is needed to respond to the COVID-19 pandemic, the text of the Notice is broadly written, suggesting a potentially wide rage of products eligible for tariff relief. For example, USTR is not only interested in products "directly used to treat COVID-19" but also products used to "limit the outbreak" and "used in the production of needed medical-care products." Thus, companies should consider evaluating how their products may be used by their customers to limit the outbreak and/or used in the production of other relevant medical products. One way to demonstrate this link may be for companies to obtain letters of support from relevant health and medical personnel to corroborate the importance of the product.
- Previous and existing Section 301 determinations do not bar comments. Notably, the Notice invites comments "regarding any product covered by the action in the investigation, regardless of whether the product is subject to a pending or denied exclusion request." (emphasis added). Therefore, companies that have already received a determination on previously submitted exclusion requests, or that are waiting for a decision to be rendered, may nevertheless comment on whether their product is needed to respond to COVID-19.
We will continue to monitor USTR's action in connection with the potential exclusion process for products subject to the Section 301 Tariffs in response to COVID-19 and will update this Trade Flash as appropriate.
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