Tariffs – International Trade Policy

Background

On April 4th, 2018, the Administration released a list of Chinese imports that would be subject to a new, 25% tariff as a result of an investigation conducted under Section 301 of the Trade Act of 1974. The new Section 301 tariffs would apply to over 1,300 Chinese imports. Among those listed are a number of products that healthcare providers rely on to conduct ongoing healthcare procedures and respond to public health events.

What Members Need to Know

The inclusion of healthcare products in the United States Trade Representative (USTR) Section 301 proposed tariff policy will increase the cost of delivering quality and efficient healthcare in the United States and hinder our country’s ability to prepare and respond to public health events.

A significant number of medical products critical to everyday procedures, lifesaving surgeries, as well as products used for broad public health preparedness efforts are made outside of the United States. It is important for both Congress and the Administration to understand the complexities of the U.S. healthcare supply chain, so tariffs and trade policies do not create unintentional supply chain disruptions and product shortages

Outlook

On June 20, 2018, the USTR announced a final list of tariffs which applied to 818 out of the 1,333 products that were included on the original proposed list. A 25% tariff on these products went into effect as of July 6th, 2018. In a notice published on August 16, 2018, the USTR determined to take additional action and add 25% tariffs to another list of products, which went into effect on August 23, 2018. Most recently, on September 17, 2018, the USTR finalized tariffs on approximately $200 billion of Chinese imports. The tariffs went into effect on September 24, 2018 and will initially be in the amount of 10%. Starting January 1, 2019, the tariffs will increase to 25%. With the help of its members, HIDA was able to remove 120 products across all three lists, including syringes, medical gloves, hospital bedsheets and certain wipes.

The USTR published a process for seeking exemptions from the tariffs—the determinations will be on a product by product basis and final decisions on exemptions will be published periodically. The deadline to request exemptions for the first list was October 9, 2018 and the deadline for the second list is December 18, 2018. Members must submit requests for exemptions via www.regulations.gov. HIDA Government Affairs published an FAQ that details the USTR exclusion process and is available on this page.

Update:  Currently, the USTR is not offering an exclusion process for products that remained on the third list. In October, Congress sent a bipartisan letter to the USTR, with 167 signatures, urging the Administration to allow for an exclusion process. HIDA Government Affairs will continue to monitor the situation and provide updates.

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