The Treasury Department and Customs and Border Protection issued the new rules following an executive order that Trump signed Saturday.
The three-month deferment will cover payments for goods imported in March and April and be available to companies seeing “a significant financial hardship.”
Amid the COVID-19 shutdown, that’s almost every company in the fashion space.
The duty deferrals, though, don’t apply to goods associated with antidumping and countervailing duties and Section 201, 232 or 301 trade remedies — the trade war tariffs are still on in full.
Washington and Beijing reached a kind of truce in the trade war last month, but left the removal of tariffs to “Phase Two” negotiations that were seen as coming together after the election this November.
Importers welcomed the news of the duty deferrals, but pushed for more, and the key textile trade group viewed the move skeptically.
“American companies have been faced with the difficult decision to pay their tariff bill to the U.S. government or keep American workers on payroll,” said Steve Lamar, president and chief executive officer of the American Apparel & Footwear Association. “The deferral of these payments will provide some of the liquidity needed to keep more Americans employed and more American companies operational during this crisis.”
But he urged the administration to go further and called for “all goods — including textiles, apparel, footwear, and accessories facing Section 301 tariffs — be covered by this deferral action. Every day we have to pay those duties means another day we can’t pay our workers.”
Lamar also called for additional stimulus measures, including more funding for the Paycheck Protection Program, inventory tax credits and main street lending for all.
But Kim Glas, president and ceo of the National Council of Textile Organizations, which has been supportive of aggressive trade action against China, said the U.S. industry still needs to be protected as it seeks to protect front-line workers.
“At a time when domestic textile producers and its workforce have mobilized to transform their production lines to manufacture the personal protective equipment supplies for frontline health-care and medical workers fighting the COVID-19 pandemic, the administration’s decision to defer duties for 90 days on the vast majority of products imported into the United States is counterproductive,” Glas said.
“This move contradicts the administration’s top stated priority of rebuilding American manufacturing and buying American and could have severe negative implications for the entire U.S. textile industry, whose companies and workforce already are facing enormous economic hardship,” she said.