Congressional Research Service Says President Could Drop Tariffs on Medical Supplies
A recent report from the Congressional Research Service noted that even as some countries place export restrictions on supplies needed to fight the COVID-19 pandemic, the president could remove tariffs on medical supplies under Section 318 of the Tariff Act of 1930. The CRS noted the legality of this section has never been tested, but given that so far, federal courts have upheld the constitutionality of Section 232, it could be that the president could have such broad power to remove tariffs, as well.
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The report noted how many countries have restricted medical exports, and while that kind of action would typically not be acceptable under World Trade Organization rules, the WTO said if they are time-limited, they would be acceptable.
The G-20 countries put out a statement March 26 after a video conference that said: “Consistent with the needs of our citizens, we will work to ensure the flow of vital medical supplies, critical agricultural products, and other goods and services across borders, and work to resolve disruptions to the global supply chains, to support the health and well-being of all people. We commit to continue working together to facilitate international trade and coordinate responses in ways that avoid unnecessary interference with international traffic and trade. Emergency measures aimed at protecting health will be targeted, proportionate, transparent, and temporary. We task our Trade Ministers to assess the impact of the pandemic on trade.”
The report noted that as the pandemic has spread, the cost of surgical masks increased 600% and the cost of medical gowns doubled.
There has been talk at the WTO about eliminating tariffs and non-tariff barriers on healthcare goods going back 14 years, the report noted. “These negotiations remain ongoing,” it said.
The researchers said that other countries have created “green lanes” for medical supply imports, but said that CBP has not proposed doing so. If it wished to, it might take too long to matter, because of the need to do a rulemaking, the report said.“Congress could, however, consider using its constitutional authority to 'regulate Commerce with foreign Nations' to more quickly implement new customs prioritization procedures,” the report said.