GOP Senators Urge Duty Deferrals as Domestic Industry Groups Object
A group of Republican senators supports a temporary delay in duty collections, they said in a March 25 letter to President Donald Trump. “We believe it would be wise to provide a temporary deferral of duty collection for businesses to opt-in to,” said the letter, which was led by Senate Finance Committee Chairman Chuck Grassley, R-Iowa. “There are a number of ways to do this that would be helpful that are already being reviewed through the interagency process. Similar to the IRS providing Americans an additional 90 days to make tax payments without incurring interest or penalties, a duty deferral would be a commonsense way to improve the liquidity of our businesses during this time of economic disruption.”
Meanwhile, there's an apparent legislative push to suspend tariffs, according to Sandler Travis lobbyist Nicole Bivens Collinson. While “CBP and the White House are debating whether or not to expand” the short-term duty deferrals into a “blanket suspension of all tariffs on all products,” a legislative change would allow for more certainty, Sandler Travis said. “These companies are seeking support in Congress for legislation that would require a 90-day tariff suspension,” though “Trump administration officials have thus far resisted the idea,“ it said.
Before the senators sent their letter, domestic industry groups said they oppose such measures. CBP shouldn't allow for deferred customs duty payments either for short-term requesters or on a longer and broader basis (see 2003200038), the Coalition for a Prosperous America said in a March 24 letter to Acting CBP Commissioner Mark Morgan. The group asked that CBP “not delay collection of import duties that are essential to protect American jobs.” CBP is already approving some brief deferrals upon request and a longer deferral of 90 days is being considered (see 2003230025).
“At a time of financial hardship and unrest as a result of the coronavirus -- CBP should not reintroduce unfairly traded goods to cause American workers further economic pain because of lobbying efforts of stateless companies,” said the CPA, which is generally supportive of tariffs. “Layoffs and loss of revenue are two issues the American public are dealing with daily. This effort by CBP will only exacerbate the financial situation of countless Americans.”
Such policies would allow for violators of fair trade laws to avoid previously determined penalties, the CPA said. “While President Trump and Congress are working to provide economic relief and stem the tide of financial woes -- the CBP appears to be doing the exact opposite,” it said. “Lifting payment of duties, which include antidumping and countervailing duties -- strikes at the heart of American industry. Even worse, these American industries that will feel the direct pain of CBP’s actions -- have already demonstrated past injury because of unfair trade practices, and now -- CBP seeks to provide relief to importers who have run afoul of accepted trade practices. This cannot stand.”
Although CPA seems to assume a broader deferral would include all duties, presumably the administration could limit the deferral to only the regular duties, taxes and fees, an industry lawyer said in a recent interview. That might allow the government to avoid the more contentious issue of deferring trade remedy payments, the lawyer said.
CBP's legal authority to change the fiscal requirements of customs collections is yet to be detailed by the agency, but CPA is also concerned about those ramifications for duty deferrals. “The idea of limiting funds to the US Treasury during a time of national emergency is unconscionable,” it said. “CBP should be doing everything in its power to enforce current standards and law to see that Treasury is supported in this time of need. We ask that CBP immediately correct its message and reassure the American public that it will not lift duties that protect their jobs. The Trump administration is working hard to protect those jobs. The CBP needs to provide immediate clarification and correct its prior comments.”
A group of iron and steel industry associations voiced some similar concerns in a letter to CBP's Morgan on the same day. While also objecting to any delayed collections of antidumping or countervailing duties and Section 301 tariffs, the groups pushed especially hard against deferrals of Section 232 duty payments. “It is of vital importance that CBP not exercise its discretionary authority to facilitate the entry of steel imports without requisite and timely payment of duties, taxes and relevant fees,” the associations said. “If CBP plans to issue any further guidance on potential changes to the collection of import duties, it must immediately engage with relevant stakeholders, including the domestic steel industry, on the significant impact this action could have.”