The Coronavirus Crisis Is the Right Time For Free Trade

Hospitalman Jeremiah Lewis, from San Antonio, organizes medical supplies aboard the Military Sealift Command hospital ship USNS Mercy off the coast of southern California March 24, 2020. Picture taken March 24, 2020. U.S. Navy/Mass Communication Specialis
March 30, 2020 Topic: Politics Region: Americas Blog Brand: The Buzz Tags: Trade WarFree TradeCoronavirusCOVID-19Trump Administration

The Coronavirus Crisis Is the Right Time For Free Trade

We need medical supplies, pronto.

The Trump administration has not been shy about expressing its fondness for tariffs. It imposes them whenever it can find a reason, and resists any call to lower or remove them afterwards. But now and then there is an argument against tariffs that even it cannot withstand: In the context of a pandemic, tariffs on medical‐​care products are a truly awful policy.

The administration recently removed a few of the tariffs it had imposed on imports of medical products from China as part of the U.S.-China trade war. Subsequently, late last week, it put out the following notice: “In light of ongoing developments, the Office of the U.S. Trade Representative (USTR) is requesting public comments on possible further modifications to remove duties from additional medical‐​care products.”

With the internet, it’s very easy to file public comments, and as of the last time I checked there have been 394 of them. Some are like this:

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| TARIFFS |

 

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I approve this message, but it’s not directly on point and probably won’t influence the administration. Others are more helpful. Here is one example:

Consistent with the USTR’s request for public comments to modify or remove duties for essential medical‐​care products we are offering specific information on non‐​contact infrared thermometers. These products are medically necessary in the response to limit the outbreak of COVID-19.HTSUS Code: 9025.1990.10 Digital battery operated non‐​contact infrared thermometers are used for screening and treating patients for elevated body temperature. The thermometers measure body temperature, surface temperature and ambient temperature. The thermometers do not require entering the patient’s body or make contact with the skin thereby reducing the risk of cross‐​contamination to patients and health care workers. There is a visual/​audible alert when temperatures exceed 100.4F. They are accurate, precise and the measurements are displayed instantly. The operating procedure is simple thus reducing human errors. Our company is an importer and distributor of non‐​contract infrared thermometers. Duties on these products increases the cost and impacts the ability to obtain them and to sustain the critical supply chain. The duties add significant cost to the distribution chain, and to the end users such as hospitals, clinics, long term care facilities and services conducting screening to limit the COVID-19 outbreak.

And here is another:

On behalf of the companies listed at the bottom of this text, we are requesting an exemption from 301 tariffs “on all products listed in Section XI (Textile and Textile Articles) that are suitable for use in making protective masks, hospital gowns, or any item that the Secretary of Health and Human Services determines to be a priority for use during a public health emergency declared pursuant to section 319, and is certified at the time of import or reliquidation by the importer for such purpose.” We would suggest making the effective date the date the 301 tariffs were imposed so that material currently sitting in factories that are useable for serving this purpose also are covered under the exemption. This will increase liquidity at these companies as they reliquidate those items so they can afford to stock fabrics that they need now. The Men’s Apparel industry is prepared to convert its plants to produce critical needs, with the initial focus being protective masks. The industry’s hope is to be able to begin production using existing fabric supplies, and then enhance the products if possible, by finding more effective input materials. Our hope is to source as much as possible from domestic sources especially given time constraints. We are also being approached to make hospital gowns with inputs yet to be determined. This industry does not normally supply medical end users. We need the latitude to acquire fabrics to make whatever we are asked to make without concern of a large penalty duty assessment. We also don’t want to find that at the end of the current emergency we are sitting with fabrics that were also subject to high 301 duties that are not part of our normal supply inventory. We believe that domestic mills also should have access to yarns and other items they need to supply our industry and others who want to produce needed products. Therefore, we urge you to quickly adopt a broad exemption that covers textile products tied to serving the emergency needs of our country.

I sincerely hope that the Trump administration takes these and other requests from the private sector seriously and removes tariffs on the products at issue. We know the views of this administration on protectionism, trade deficits, etc., and it is not going to be eager to grant these requests. For the time being, however, the administration should put the broader trade policy debate aside and deal with the most urgent public health crisis most of us have ever seen. If there is a remotely plausible argument as to how removing tariffs on particular products could help with this crisis, the administration should take action.

This article by Simon Lester first appeared at CATO.

Image: Hospitalman Jeremiah Lewis, from San Antonio, organizes medical supplies aboard the Military Sealift Command hospital ship USNS Mercy off the coast of southern California March 24, 2020. Picture taken March 24, 2020. U.S. Navy/Mass Communication Specialist 2nd Class Ryan M. Breeden/Handout via REUTERS.