Some relief for companies facing economic struggles as a result of the third tranche of tariffs applied to goods from China could be coming soon.
President Donald Trump announced the latest round of tariffs, raising tariffs on $200 billion in Chinese imports from 10% to 25% the second week of May.
Sen. Jerry Moran, R-Kan, who is chairman of the Senate Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies, says after the announcement that he has secured a commitment from the U.S. Trade Representative Robert Lighthizer that there will be an exclusion process for the new round of tariffs — something that Lighthizer had earlier indicated he would not do.
The exact rules for the exclusion process will be rolled out in the coming weeks, according to a Moran spokeswoman. The process allows businesses that are negatively impacted by tariffs on products they import — such as manufacturers who import parts from China for assembly into machinery in the U.S. — to apply for an exclusion, which will then be either awarded or denied by the USTR.
The spokeswoman says that exclusions will be made based on the 10-digit tariff code that pertains to a specific product. She says there is not a cap or limit on how many businesses can apply to be excluded, but that each request would be individually evaluated.
She says if an exclusion is granted, it would apply to the entire tariff code, even if more than one business imports that product.
Moran and Ranking member Sen. Jeanne Shahee, D-N.H., had sent a joint letter to Lighthizer on March 12 expressing concern after he testified before the House Ways and Means committee in late February that he had no intention of implementing an exclusion process for a third round of tariffs.
The letter reminded Lighthizer that Congress had passed legislation requiring him to provide for exclusion.
“As you are aware, title I of division C of the Joint Explanatory Statement accompanying the Consolidated Appropriations Act, 2019, states: USTR shall establish an exclusion process for tariffs imposed on goods subject to Section 301 tariffs in round 3,” the letter read. “This process should be initiated no later than 30 days after the enactment of this act, following the same procedures as those in rounds 1 and 2.
“Although we agree that actions must be taken to curb the unfair trade practices of China, the imposition of the third round of Section 301 tariffs is impacting U.S. importers who deserve the opportunity to petition their government for relief. We are compelled to remind you that any actions short of implement an exclusion process for the third round of Section 301 tariffs by March 17, 2019, will be in defiance of the express direction of Congress.”
Lighthizer has now assured Moran that he will comply with Congress’s requirement for an exclusion process.
Moran has acknowledged that action against China to ensure fair trade is needed, but disputes that tariffs is the only way to make gains.
“I support the Trump administration’s efforts to hold China accountable for unfair trade practices and the theft of trade secrets and intellectual property rights from American companies, and I continue to support the Administration’s pursuit of strong enforcement of global trade rules,” Moran says. “However, tariffs are not the only tool to make certain other countries follow international trade rules and treat American exporters and workers fairly. I will continue urging the Administration to quickly reach an agreement with China that eliminates the harmful tariffs, while also addressing China’s bad behavior on trade policy.”
In the meantime, he says, American manufacturers and businesses need the opportunity to apply for an exclusion from the tariffs.
“As chairman of the Commerce, Justice, and Science Appropriations Subcommittee, I secured a commitment from U.S. Trade Representative Lighthizer to establish an exclusion process for the third round of tariffs on China,” Moran says. “I am working with USTR to make this exclusion process available as soon as possible, and I will continue to utilize my role on the Senate Appropriations Committee to work toward lasting solutions to these ongoing tariff battles.”