Dive Brief:

• A new rule from the U.S. Treasury Department and Customs and Border Protection will allow importers to delay payment of some tariffs for 90 days on goods imported during March and April 2020, according to a release from the agencies.
• The delay will not apply to all imports. Notably, the Trump administration’s tariffs on Chinese goods included in Section 232, Section 201 or Section 301 are not eligible. Anti-dumping duties will also not be eligible.
• Importers must demonstrate “significant financial hardship” to qualify for the temporary tariff delay. “An eligible importer’s operation must be fully or partially suspended during March or April 2020 due to orders from a competent governmental authority limiting commerce, travel, or group meetings because of COVID-19,” the rule reads.

Dive Insight:

The U.S. levies tariffs on billions of dollars in imports from China, but this latest rule will not provide relief for companies paying these duties. The U.S. business community has been lobbying the Trump administration for weeks to delay the collection of import fees.

“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 rule reads. The new rule is an attempt by the Trump administration to delay some of the costs importers have to pay and provide businesses with temporary access to cash that would otherwise go toward tariffs.

Companies across sectors are feeling the financial hit from the coronavirus outbreak as social distancing measures and stay-at-home orders lead to reduced consumer demand. Retailers have furloughed or laid off large swaths of their workforces. And the manufacturing sector is seeing a contraction expected to last another month.

“[W]e 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 retail community welcomed the delay in statements released Monday but said there is still more the administration could do.

“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,” Brian Dodge, president of the Retail Industry Leaders Association, said in a statement emailed to Supply Chain Dive.

National Retail Federation CEO Matthew Shay said the delay will improve cash flow for businesses and allow for “a faster recovery once the pandemic has passed,” according to an emailed release.

The U.S. Chamber of Commerce has been pressing for tariff relief throughout April and called on the United States Trade Representative to “automatically extend all the exclusions to the Section 301 tariffs that are slated to lapse in the coming months,” according to a statement earlier this month.