Trump to suspend some tariffs for 90 days
Donald Trump is poised to announce a 90-day suspension of tariff payments on certain imports, including some apparel and light trucks, as the US president seeks to blunt the economic damage from the coronavirus pandemic.
The Trump administration in recent weeks allowed some tariff exemptions for medical supplies US officials had sought to bolster domestic stockpiles of protective equipment and other goods used to combat the outbreak.
But the latest action would have a broader impact on the struggling US economy, as the White House tries to keep businesses afloat following a sudden drop in demand.
According to one person briefed on the tariff decision, the suspension would not include some of the most high-profile tariffs imposed by Mr Trump during the trade wars that have marked his presidency, including punitive levies on $360bn of Chinese imports, and levies on imported metals imposed on national security grounds.
Speaking to reporters on Tuesday evening, Mr Trump said he still had to give a final green light to the tariff deferral. “That might be but I’m going to have to approve the plan,” he said.
US Trade Representative’s office did not respond to a request for comment. Earlier on Tuesday, Bloomberg News reported the partial scope of the tariff relief, which is expected to be unveiled in an executive order.
Corporate America had been putting increasing pressure on the White House to consider tariff relief as it explored ways to support the economy, and was pleased that the Trump administration was moving in that direction.
John Murphy, senior vice-president for international policy at the US Chamber of Commerce, said the move was “welcome” and would be particularly important for apparel and footwear companies paying tariffs between 15 per cent and 30 per cent on many imported goods.
“To me it’s all about providing liquidity, and that’s the big theme,” Mr Murphy said. “There’s a huge crunch going on right now, and companies are trying to shore up their credit lines and do anything they can to use facilities in the [stimulus bill]. So I think of this as a financial measure more than a trade matter,” he said.
More than 100 chief executives had written to the White House on Tuesday to urge the Trump administration to delay the collection of the duties for 90 to 180 days. “Delaying duties helps us preserve cash flow — critically important during a prolonged period of little to no revenue — allowing us to keep our businesses in operation so we can preserve US jobs,” they wrote.
Signatories spanned a range of sectors and included the chief executives of Levi Strauss & Co, the jeans company, Adidas North America, and Bayer US, the American branch of the pharmaceutical company.
The decision to pause tariff collections on certain goods to help shore up the US economy represents an implicit admission by the Trump administration that levies are a burden on importers.
The economic effect will be limited, however, by the fact that Mr Trump is not pausing tariff payments on a broader range of imports, including those he imposed during the 20-month long trade war with China.
Supporters of a more hardline stance on trade were unhappy with Mr Trump’s decision. “If anything, this crisis should awaken us to the need to strengthen domestic manufacturing, not encourage the further outsourcing of production and jobs. But that’s what this order could do,” said Scott Paul, president of the Alliance for American Manufacturing.