Retailers Want Trump's COVID-19 Duty Relief To Go Further

By Alex Lawson
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Law360 (April 20, 2020, 1:56 PM EDT) -- Retail industry groups on Monday welcomed the Trump administration’s new plan to provide tariff relief during the novel coronavirus outbreak, but also pushed for an expansion of the policy that would allow for the deferment of even more tariff payments.

The administration rolled out a new policy late Sunday night that allows importers facing “significant financial hardship” from the COVID-19 crisis to delay the payment of certain tariffs for up to 90 days. The announcement came after weeks of encouragement from the retail and other import-reliant sectors for President Donald Trump to blunt the economic blowback from the pandemic.

But the policy applies only to standard U.S. tariffs, not remedial duties or the extra levies Trump has placed on steel, aluminum and scores of Chinese products. The policy also applies only to imports made in March and April, further winnowing the scope of overall relief.

Retail Industry Leaders Association President Brian Dodge applauded the move as an initial step, but said that the deferment period should last twice as long and apply to all duties collected at U.S. ports of entry.

“While the deferral of select duty payments is helpful and warranted, the deferral of all duty payments for at least 180 days would do even more to assist retailers as they navigate this unprecedented pandemic,” Dodge said in a statement. “Millions of jobs are on the line, and we urge the administration to consider further duty relief to help retailers put workers back on the payroll when this crisis abates.”

National Retail Federation President Matthew Shay struck a similar tone, thanking the administration for making the move but also encouraging Trump to “broaden these deferrals for additional relief.”

The duty deferment policy came after weeks of mixed signals from the White House on its tariff response to the outbreak. A number of medical and safety equipment imports from China have already been spared from duties, but importers repeatedly pushed the U.S. for broader action as the global economy wobbled under the weight of self-imposed lockdowns.

At one point, the government floated a small-scale duty-deferment proposal last month, only to walk it back a week later before eventually formalizing the policy on Sunday evening.

Along with its application to just a sliver of U.S. duties, the deferral policy also places conditions on the firms that can apply for duty payment extensions.

The rule issued by the U.S. Treasury Department stipulates that in order to qualify, importers “must demonstrate a significant financial hardship." 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 relating to their hardship on hand as part of their standard bookkeeping.

Calls for broader tariff action also emerged from the trade bar. Hogan Lovells partner Kelly Ann Shaw, who served in a variety of U.S. trade roles before leaving the government in November, framed the move as an initial step that the White House should look to build upon.

"There are still more tools in the president’s trade toolbox that can be used to help get lifesaving equipment into the hands of those who need it as well as help our companies get back on their feet," Shaw said in a statement.

--Editing by Jack Karp.

For a reprint of this article, please contact reprints@law360.com.

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