President Trump recently signed an executive order delaying the collection of certain tariffs for 90 days.
The proposal, published as an interim final rule by the Treasury Department and Customs and Border Protection, gives businesses that have faced significant financial hardship the option to defer payments of duties, tariffs, and fees for 90 days.
This is a strong step toward ensuring importers and manufacturers have the liquidity they need during the Coronavirus pandemic and builds upon past actions taken by Congress and the administration to help American businesses and workers during the crisis.
However, more should be done toward providing Americans relief from tariffs. For one, this proposal is only temporary relief. While it delays payment, businesses will still eventually owe these tariffs.
In addition, the proposal excludes billions of tariffs recently enacted under Section 201, 232, and 301. These tariffs have been imposed on almost $400 billion worth of goods in the past two years, significantly increasing costs for Americans.
These should also be delayed, or permanently repealed as part of the response to COVID-19. This would have significant economic benefits. According to research by Trade Partnership Worldwide, suspending these will increase the U.S. economy by more than $75 billion, or 0.4% of U.S. GDP.
The fact is, tariffs are taxes. They are taxes on American consumers and American producers who use imported products. They particularly fall hard on industries that rely on imported products as an input, resulting in higher prices, leading to increased costs for consumers, lowering wages and leading to fewer jobs for American workers.
Moving forward, trade should be promoted as it is vital to the American economy and employment – more than 20 percent, or 41 million jobs in the U.S. directly tied to trade.
The Trump administration should be applauded for delaying collection of some tariffs. However, more should be done to suspend and repeal all tariffs moving forward.