Trump mulling pause in trade wars to ease economic stress
U.S. President Donald Trump is considering a proposal that would allow companies to defer their payments on imported goods subject to tariffs for 90 days, as a means to ease the financial strain hitting the American economy as a result of the coronavirus crisis.
Though Trump has denied he is considering the proposal, Bloomberg reported on 25 March his administration has debated the deferment program with U.S. Customs and Border Protection and other government agencies. White House Economic Advisor Larry Kudlow in particular has advocated for the move to allow the deferral of tariff payments, Bloomberg reported.
The move is backed by prominent politicians of both political parties, including senators Dianne Feinstein (D-California), Pat Toomey (R-Pennsylvania), Kamala Harris (D-California), Doug Jones (D-Alabama), Lamar Alexander (R-Tennessee), Ben Sasse (R-Nebraska), and Jerry Moran (R-Kansas), and House Republican Leader Kevin McCarthy (R-California). On 26 March, they sent a letter to Treasury Secretary Steven Mnuchin calling for a deferral of all tariffs for 90 days “or until the crisis passes.”
“The coronavirus is causing major damage to the U.S. economy. While Congress has now enacted a wide variety of economic aid, many industries and businesses, including small businesses, will still face significant cash-flow problems. Retailers have already had to close more than 47,000 stores in the United States, and manufacturers have shut their doors to protect workers. We anticipate that hundreds of thousands, if not millions, of American workers at retail companies and the thousands of companies that supply them will be furloughed in the coming weeks. Additional measures to help businesses ensure they have enough liquidity to weather the crisis are necessary,” they wrote. “At such a moment when Congress has clearly indicated that deferring employer taxes should be a part of the U.S. response to the crisis, the Treasury Department should direct that all tariffs will be deferred for at least 90 days and, more broadly, until the companies paying them can emerge from the ongoing crisis.”
The move is backed by the trade association Americans for Free Trade, an umbrella organization representing more than 160 trade groups. It is opposed by the Coalition for a Prosperous America, which represents agricultural, manufacturing and labor members that support Trump’s tariffs on goods from China, the European Union, and other countries.
Separately, on 20 March, Customs and Border Protection announced it will approve delayed payment of duties, taxes, and fees on a case-by-case basis, based on difficulties companies have had in completing and filing related paperwork in a timely fashion due to the current complicated business environment brought about by the coronavirus outbreak, the Wall Street Journal reported.
And on 25 March, a group of Republican senators wrote a letter to Trump asking he not implement any further tariffs during the global health crisis.