Trump exempts virus-hit US businesses from import tariffs  

President Donald Trump will allow US businesses hit hard by the coronavirus pandemic to defer payments on a limited range of import tariffs, as his administration eased its hardline posture on trade to support the economy.

Steven Mnuchin, the US Treasury secretary, and Chad Wolf, the acting secretary of homeland security, announced the move late on Sunday.

“By postponing the deadline to deposit certain duties, taxes and fees for 90 days, we are providing much needed relief to affected businesses,” said Mr Mnuchin. “This will protect American jobs and help these businesses get through this time.”

The reprieve is only partial, since it will not cover tariffs on more than $360bn of Chinese imports that were imposed by Mr Trump during a 20-month trade stand-off with Beijing that remain in place despite a truce reached in January. It also will not apply to levies imposed by the US on national security grounds against imports of steel and aluminium over the past two years.

It nonetheless marks an acknowledgment by the Trump administration that import levies are a burden on US importers, which its top officials, including the president, had regularly dismissed.

“Many importers of record will be receiving diminished or no revenue during this time while still incurring costs, including the duties, taxes, and fees associated with imported merchandise for their clients and supply chains,” the Department for Homeland Security and the US Treasury said in the regulatory notice that accompanied the announcement.

The document added that there were also logistical challenges associated with tariff payments in this environment. “Employees are having difficulty getting to work or are having technical issues with working remotely, making it difficult to contact the individuals responsible for the release of funds, which is leading to delays in payments of duties, taxes, and fees,” the statement said.

To qualify for relief, companies will have to show that they are experiencing “significant financial hardship”, meaning their operations have been fully or partially suspended and their “gross receipts” are less than 60 per cent what they were in the same period of 2019.

Trump administration officials have weighed easing some tariffs as part of stimulus measures to offset the fallout from the coronavirus pandemic, but they appeared to have ruled it out earlier this month. Larry Kudlow, the director of the National Economic Council, said that even a limited relaxation of tariff payments was too “complicated” and would send the “wrong signals” about Mr Trump’s trade policies.

Even so, US businesses and lobbyists have kept up the pressure on the White House to allow some flexibility on tariffs.

The administration had in recent weeks been issuing increasing numbers of tariff exemptions on imported products that were directly relevant to the coronavirus pandemic, particularly medical supplies. But this action could offer a reprieve from levies to a broader swath of sectors.

Kevin Brady, a Texas Republican and his party’s most senior representative on the House Ways and Means committee, said it would make US companies better able to survive. “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,” he said.

But trade hawks in Washington were wary of Mr Trump’s move.

“A lot of import sensitive domestic industries — glassware, textiles & apparel, light trucks — will face new pressures from foreign competitors, just as they are seeking to try and stay alive. Is forgiveness next?” asked Mike Wessel, a commissioner on the United States-China Economic and Security Review Commission, which monitors US-China trade relations, on Twitter.

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