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Law360 (April 19, 2020, 10:48 PM EDT) -- Importers that have suffered "significant financial hardship" in the wake of the novel coronavirus outbreak may be given a 90-day extension on the payment of certain duties, the Trump administration announced Sunday night.
An executive order from President Donald Trump teed up the policy shift as the White House heeded growing calls from the business community to liberalize trade flows and soften the economic blow of the outbreak.
"By postponing the deadline to deposit certain duties, taxes, and fees for 90 days, we are providing much-needed relief to affected businesses," Treasury Secretary Steven Mnuchin said in a statement. "This will protect American jobs and help these businesses get through this time."
The administration has wrestled with limited duty extensions over the past several weeks, rolling out a deferment policy in late March only to walk it back less than a week later.
Though import-reliant business groups and free trade advocates have pleaded with Trump to ease duties as part of his COVID-19 response effort, the rule unveiled on Sunday night offers only limited relief.
Trump's order applies only to so-called most-favored nation tariffs, which are codified in the standard U.S. tariff schedule. The 90-day exemption will not apply to anti-dumping and countervailing duties nor to Trump's national security duties on steel and aluminum or the scores of levies placed on Chinese products over the last two years.
In order to qualify for a 90-day tariff extension, importers "must demonstrate a significant financial hardship," the administration said in its rule enacting the policy. Specifically, importers will only be eligible if their operations were fully or partially suspended in March or April due to lockdown orders stemming from COVID-19, the rule said.
The administration said that companies will not need to provide documents to the government to qualify for an extension, but will be required to keep documents of its hardship on hand as part of their standard bookkeeping.
While the exemption will ultimately touch just a sliver of duties facing U.S. importers, House Ways and Means Committee ranking member Kevin Brady, R-Texas, applauded the administration's move.
"This will free up much-needed cash, allowing these businesses to pay these duties when they, as well as the economy, are on sounder footing," Brady said in a statement. "I'm thankful for his decisive leadership in this crisis."
The trade prong of the administration's coronavirus response has involved a number of executive orders invoking wartime laws to increase production of medical and safety supplies, as well as directives allowing restrictions on exports of those supplies.
--Editing by Katherine Rautenberg.
For a reprint of this article, please contact reprints@law360.com.
