Sens. Coons, Lankford, Reps. Kind, Walorski, introduce bipartisan, bicameral Import Tax Relief Act

Requires creation of exclusion process for certain tariffs on Chinese imports

February 28, 2019

WASHINGTON – Senators Chris Coons (D-DE) and James Lankford (R-OK) today announced the bipartisan, bicameral Import Tax Relief Act, which would require the Executive Branch to create an exclusion process for List 3 (and any future list) of Chinese imports subject to Section 301 tariff imposition. Commensurate with the US Trade Representative’s (USTR) exclusion process for Lists 1 and 2, US companies would also be able to apply for a refund for duties paid on imported goods subject to these tariffs that are granted an exclusion.

The bill would also set the specific criteria by which product-wide exclusions must be granted. Specifically, the bill would exempt from tariff imposition those items for which there is no commercial access outside of China, items for which the tariff would increase the cost of living for low- and middle-income families in the US, and items that do not directly benefit from China’s non-market-based policies. In the House, a companion version of the Import Tax Relief Act has been introduced by Representatives Ron Kind (D-WI) and Jackie Walorski (R-IN).

“It is time for China’s unfair trade practices to come to an end,” said Sen. Coons. “It is vital, though, that the Administration not harm our own American companies in the course of pressuring China. That’s why I’m introducing the bipartisan Import Tariff Relief Act, to require that US companies be given the opportunity to apply for exclusions from tariffs on Chinese goods. If you manufacture a product here in America, you shouldn’t have your supply chain upended for this trade war.”

“US importers deserve a chance to petition their government for import tax relief, and this bill would set up a process to do just that,” said Sen. Lankford. “I have heard from many Oklahoma businesses that have expressed concern about the impact these tariffs will have on their ability to hire employees, give back to their communities, and expand their business operations. Already, American importers have paid the US government more than $12 billion in import taxes due to last year’s tariff action on Chinese imports, which has a direct impact on our economy since those costs are passed down to consumers in the form of price increases on food, clothing, and shelter, on which low-income families spend a disproportionate share of their incomes compared to wealthier families. Unfortunately, this has resulted in a reverse-redistribution of wealth, whereby Americans basically end up paying their government $12 billion. I am proud to partner with Senator Coons to introduce this bipartisan, bicameral legislation to help provide necessary financial relief for families and businesses across the US.”

The first two rounds of tariffs imposed under Section 301 of the Trade Act of 1974 included an exclusion process (the process by which US importers can request exemption from the tariffs), but the third round, imposed on $200 billion worth of Chinese goods, did not include such a process. The third tranche of tariffs was imposed on September 24, 2018, pursuant to Section 301 of the Trade Act of 1974.

According to the Congressional Research Service, as of February 21, US-based importers have paid $12.2 billion to the government as a result of tariffs imposed under Section 301 of the Trade Act of 1974, more than double the $5.8 billion collected in tariffs on steel and aluminum pursuant to Section 232 of the Trade Act of 1974.