Most Commenters Ask for Medical Product Section 301 Exclusions to Continue
Most trade groups and companies that have filed comments so far on extending Section 301 tariff exclusions on COVID-19 pandemic-related imports from China want those tariffs to continue to be waived. Comments were due Sept. 27. The Office of the U.S. Trade Representative announced Sept. 27 that it will temporarily extend the exclusions to Nov. 14, rather than Sept. 30, so that agency employees can have more time to analyze public comments (see 2109270044).
Some trade groups also said that there should be changes to the pandemic-related goods list. The Medical Imaging & Technology Alliance said that there is the need to use medical imaging to treat and monitor COVID-19 patients, so the exclusions should continue. "There were many necessary exclusions for medical imaging manufacturing components and products used with COVID-19 patients that were not fairly considered during the initial COVID-19 exemptions process started in March 2020," the group said, so they asked USTR to reexamine all the product submissions from that period. The trade group noted that ultrasonic scanning machines were exempted, but manufacturing inputs for the machines were not.
Siemens, which manufactures ultrasounds, also asked that the equipment remain on the exclusions list, as it is helpful in showing the "ground-glass" telltale sign of lung damage due to COVID-19.
The Retail Industry Leaders Association said that the exclusion that applies to thermometers and pulse oximeters should not be only those intended for professional use, but also those sold in retail stores, as the proper use of a pulse oximeter can tell patients when they need to go to the hospital. RILA also asked that pumps used for hand sanitizer and liquid soap bottles, masks and hand sanitizer continue to be spared Section 301 tariffs.
The National Retail Federation said its members "need to know they can get [personal protective equipment (PPE)] in sufficient quantities, in a timely manner, and at costs that are not exorbitant. Extending the exclusions for these all-important items will help provide that. Specifically, our members have highlighted the following products that are essential for consumers as well as the workforce: face masks, gloves, soap dispensers, soap, hand sanitizer, blood pressure monitors, pulse oximeters and thermometers. "We also encourage USTR to reestablish a general exclusion process for products subject to the China 301 tariffs, especially for those exclusions that previously expired," NRF said.
The National Taxpayers Union Foundation wrote: "It would not be wise to increase tariffs on medical goods needed to respond to the pandemic. We commend you on previously extending tariff exclusions for these goods, and urge you to extend them or, even better, make them permanent so that American businesses and healthcare providers are better able to effectively respond to the pandemic."
INDA, the Association of the Nonwoven Fabrics Industry, said that USTR should continue to waive the tariffs on "viscose rayon staple fibers (HTS 5504.10.000). As has been well-established throughout the Section 301 exclusion process and during other policy reviews like the Miscellaneous Tariff Bill review process, viscose rayon staple fibers are not and have not been manufactured in the United States for more than a decade. China is the leading supplier of these needed fibers." INDA said the fibers are used to manufacture disinfectant wipes and surgical-style masks.
The American Hospital Association wrote, "We urge you to extend the exemptions to ensure hospitals and health systems have the supplies they need so they can continue to provide safe and effective care to all patients.
"These exempted products include basic supplies like gloves, gowns and facemasks; hand soaps and sanitizers; sterile drapes and covers; as well as more complex components required for vital X-ray and MRI services. Reliable access to an adequate supply of necessary medical products is essential for our front-line workers to meet the health care needs of their patients and communities," the AHA wrote.
It said that allowing importers to bring goods in at lower prices now will allow for investment in a more localized medical device supply chain.
Northern Technologies International echoed that argument, writing: "An extension of the exclusion will provide additional time to continue to seek and qualify alternative sources of supply. Prior to COVID, we were already looking for manufacturing outside of China and within the US. Once COVID became a global pandemic, it has put unprecedented strain on the global supply chain. Every point of the supply chain is being affected. Manufacturers don’t have capacity to take on new business, raw materials are in short supply, there is a lack of skilled labor available to support what production is available, shipping capacity is far beyond its limit, and costs associated have increased and are compounded at each level of the supply chain, pushing consumer pricing up even higher."
Parker-Hannifin, which makes a disposable mask used to administer sedation gas, said there was a surge in demand for these sorts of masks, instead of disinfecting a mask. "We have not identified an alternative supplier that has both capacity and the ability to produce products that meet customer’s expectations and patient’s needs," the company wrote. "Because this is a regulated medical product, any change in source or design presents a very complex project and requires substantial time and testing to meet FDA requirements to ensure effectiveness as well as ensure patient and healthcare professional safety."
The Clorox Company said it has already made substantial investments to increase domestic manufacturing capacity for disinfecting wipes, but "as the US consumer gets back to work and school, they are now demanding new formats (most notably in small "To Go" travel packs for use away from the home). While Clorox has already committed the necessary capital and made binding contracts to increase the US production of these types of packages, we need time to get the new lines fully operational and thus request a temporary extension of the exclusion" for 3808.94.1000.
The National Council of Textile Organizations supported an extension for fabrics that are used to produce hospital sheets, but wants the tariffs on all personal protective equipment, such as masks, gloves, face shields and protective gowns to return.
"The domestic industry and our Western Hemisphere trade partners have significant capacity to make this product. Without question, access to quality American-made PPE is in the interest of public health and our overall national security both now and for the future. However, the price differential between the United States and Chinese producers remains a considerable hurdle to getting more American PPE in the hands of frontline healthcare workers. Continuing 301 tariff exclusions for finished PPE only further increases the price divide between the two production models and will result in the new U.S. PPE supply chains that were created overnight being dismantled just as quickly," the group wrote.
Parkdale Mills also opposes continuing to waive the tariffs on imported face masks, and said it makes washable face masks.