House Passes Formula Tariff Suspension; Senate to Take Up Bill
The House of Representatives voted 421-2 to remove tariffs on imported formula through the end of the year, just over three weeks since a bill was introduced by Rep. Suzan DelBene, D-Wash., to pause the tariffs.
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Before the crisis, more than 98% of formula consumed in the U.S. was made in the U.S.; according to the Congressional Research Service, "the most-favored-nation (MFN) tariff rate for infant formula ranges from 14.9% to 17.5% depending on the content. Once a certain threshold of imports is reached, the duties on most common infant formulas increase to $1.035 per kilogram + 14.9%. Between 2012 and 2021, the United States imported approximately $149 million in infant formula, $29 million (19.4%) of which entered duty free. The average effective calculated duty rate on the remaining imports was 25.1%."
"Severely stretched supply chains and a major formula plant going off-line have left shelves barren," DelBene said on the floor before the vote. "Parents are driving hours to multiple different stores just to find any formula." Removing tariffs on imported formula "is a common sense solution," she said.
House Ways and Means Trade Subcommittee Chairman Rep. Earl Blumenauer, D-Ore., who also sponsored the bill that passed July 15, said, "This crisis requires a whole of government response. The Biden Administration has taken important steps to increase supply and I applaud the FDA’s actions to import more formula. Now Congress must act to temporarily remove tariff barriers so families can access affordable formula."
A staffer in DelBene's office said the Senate is expected to vote on a companion bill next week.
The Senate passed a bill that would waive tariffs and quotas through Nov. 14 (see 2206230063). Sen. Mike Lee, R-Utah, who led the push for that bill, responded to the news by saying: “With the highest birthrate in the nation, Utahns have particularly felt the weight of this prolonged baby formula crisis. I am thrilled to see the Formula Act pass the House with bipartisan support. We are one step closer to providing desperately needed relief to American newborns. For my part, I am committed to ensuring the bill once again passes the Senate and is signed into law.”