IRobot Lands List 3 Tariff Exclusion on Robotic Vacuums Imported From China

The Office of the U.S. Trade Representative granted iRobot an exclusion Wednesday to the List 3 Section 301 tariffs on the robotic vacuum cleaners it imports from China under the 8508.11.00.00 product code. IRobot applied for the exemption July 1 and based its argument partly on plans to shift production to Malaysia from China. It began producing entry-level vacuums in Malaysia in November, and said it will source additional models there later in 2020. The exclusion is retroactive to Sept. 24, 2018, when the List 3 tariffs took effect at 10%, and is valid through Aug. 7. The Trump administration hiked List 3 to 25% on March 2, 2019. IRobot estimated it incurred $37.9 million in 2019 tariff costs but had no “material” tariff expenses for 2018. It’s scheduled Tuesday to report Q1 results. IRobot’s was one of 107 exemptions granted for “specially prepared product descriptions” covering 157 “separate exclusion requests,” said USTR. IRobot is "pleased that the USTR determined that our rationale for an exclusion was appropriate, particularly in light of the tangible steps we have taken to establish our manufacturing activities in Malaysia," emailed CEO Colin Angle Thursday. "As the largest American pure-play robotics company, with over 800 U.S.-based employees and roughly half of our revenue generated domestically, we believe that an exclusion not only further supports iRobot's ability to maintain its technological and category leadership but it also helps ensure that robotics is an industry in which the U.S. continues to lead the world."