US shows willingness to remove tariffs on medical supplies from China

A pharmacy worker sells N95 face masks in the Manhattan borough of New York City, on Feb 27, 2020. PHOTO: REUTERS

LONDON (BLOOMBERG) - The Trump administration signalled a willingness to remove tariffs on medical supplies from China as health authorities backed by United States businesses express an urgent need for more masks, ventilators and other equipment to suppress the coronavirus pandemic.

The US Trade Representative, in a statement late last Friday (March 20), invited the public, businesses and government agencies to submit "comments on possible further modifications to remove duties from additional medical care products".

In 2017, US President Donald Trump hit China with an investigation into allegations of intellectual property theft and forced technology transfer. That led to a nearly two-year trade war in which the world's largest economies raised tariffs on each other's exports. A ceasefire was declared in January, but US tariffs on some US$360 billion (S$522 billion) Chinese imports remain in place.

Now, as the Covid-19 emergency throws the US and European economies into tailspins, the White House is coming under increasing pressure to lift those tariffs to let medical supplies flow more freely.

The US Trade Representative (USTR) said the comment period will run until June 25 and won't replace the process to request exclusions from the tariffs. Comments submitted "are limited to comments on products subject to the tariff actions and relevant to the medical response to the coronavirus", the USTR said.

"To facilitate timely consideration of possible modifications, interested persons should submit comments as promptly as possible," the agency said.

The Business Roundtable, which represents chief executives of large American companies, said in a Twitter post on Saturday that the USTR's move and others like it are needed to "ensure that imported medical supplies and essential products continue to reach hospitals and Americans quickly". Mr Trump said earlier this week that tariff relief wasn't something he was considering.

"There's no reason to do that. China is paying us billions and billions of dollars in tariffs," he said in a news conference last Wednesday. "I can't imagine Americans asking for that."

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