EnThe U.S. Customs and Border Protection agency, at the authority of President Donald Trump, will provide a 90 day deferral for the payment of tariffs due on imports in April and May. The exemptions are limited though (a) to exclude tariffs paid under section 201, 232, 301, 701 or 731 programs and (b) only for companies operating in financial hardship.
The first limitation includes special programs for: washing machines; solar panels; steel; aluminum; imports from China and; antidumping or countervailing subsidy cases.
As outlined in Panjiva’s research of April 15 there was a 6.8% year over year decline in U.S. customs duties in March to reach $4.82 billion. That reflected a combination of reduced tariff rates on imports from China (list 4A of section 301 duties) and an overall drop in U.S. imports.
Source: Panjiva
The overall impact on the economy of the reduction in duties – which reflect a tax cut – will be minimal. Not only is this a deferral rather than a cancellation, it also only affects a small proportion of the total tariff base anyway.
Panjiva’s analysis shows that tariffs paid under the section 301 ( China), section 201 ( washers and solar panels) and section 232 ( base / derived steel and base / derived aluminum) programs accounted for $3.30 billion of tariff income in February out of a total $4.82 billion, or 68.5% of the total.
There are significantly higher base-line, WTO rates in some sectors however. The footwear sector has rates over 37.5%, light truck tariffs are set at 25%, many food duties exceed 20% and many clothing products exceed 15%.
Nonetheless, only a fraction of the $1.52 billion will be granted a deferral depending on the definition of financial hardship stated.
Source: Panjiva
