By Donna Mullins, Chair, Winning Strategies Washington
WASHINGTON DC - When the Trump Administration first imposed tariffs on Chinese imports in 2018, most US companies viewed it as a temporary distraction. However, in the intervening months, it has become clear that the Trump Administration views this as a once-in-a-generation opportunity to rewrite the global economic rules and better protect US interests.Now thousands of additional US-bound products have become subject to tariffs and quotas, and American companies of all sizes have been forced to contend with these new trade realities.
The good news is that there are avenues for relief from specific tariffs and quotas, and we at Winning Strategies Washington have been actively and successfully working with US companies to secure specific exemptions from the tariff and quotas impacting their businesses.
Here are some keys to success in these efforts.
Understand the Administration is in this for the long haul and there are going to more fronts in this battle, not fewer. The Trump Administration’s aim is to fundamentally change the global trade landscape.They are not looking for incremental gains, but rather fundamental ones.This means companies waiting for a quick resolution have found themselves stuck with higher costs at a minimum, and some with persistent missing links in their supply chain.Other companies have also tried to make quick moves and shift their supply chains to other countries. However, this tack can have consequences; as the New York Times recently featured in a front-page article, one company moved quickly to reposition their manufacturing away from China to Mexico, only to learn this week that the President is likely to impose the same tariffs on Mexico.
Know your HTS codes. Many of the companies we work with found themselves unaware that Harmonized Tariff Schedule – or HTS – codes, which up until now were mainly matters for managing their shipping of imported products, are now the very basis on which these trade wars are being waged.And as the “hit list” of HTS codes subject to tariff and quotas has expanded, more and more companies have found themselves directly affected.So make sure you know your HTS codes – for all of your imported products – in this context, and are tracking the Administration’s announced and planned target lists in real-time.While some select industries have lobbied successfully to get their industry’s broad HTS categories off these hit lists, far more have found themselves subject to tariffs or quotas than not.
Know your avenues for specific relief, and seek that relief if you qualify. Under both the current tariff and quota regimes, there are established processes for companies to seek and receive specific relief – called “exclusions” – from these tariffs and quotas. There is a set process through the U.S. Department of Commerce that you need to follow. We have partnered with one of the best law firms with this expertise to expedite our clients’ applications for exclusions, as well as to make sure those applications are correct down to every last detail.If you meet the criteria, we highly recommend you seek exclusions. As of May 10, 2019, according to data from the Office of the U.S. Trade Representative, 13,757 requests for exclusion from the Chinese tariffs have been filed. Of the 13,007 which were adjudicated, 1,957 exclusions were granted outright, while 4,089 were given approval in an initial substantive review, demonstrating a nearly fifty percent success rate for exclusion requests.
For purposes of the steel and aluminum tariffs and quotas, 51,345 steel and aluminum tariff exclusion requests have been filed. Of these filings, 45,328 exclusion requests ask for an exemption from the steel tariffs; 21,464 have been approved and 6,588 have been denied. An additional 6,017 exclusion requests have been made for exemptions from the aluminum tariffs; 4,069 have been approved and 637 have been denied.
Tell your story and engage your elected leaders. In addition to filing your exclusion requests, you need to make sure to tell your story and proactively engage your Members of Congress.We have engaged Members on behalf of clients in a number of key ways.For example, when the quotas were initially announced, there was no exclusion process for quota countries like was in place for tariff countries.One of our clients testified on the need for a quota exclusion process in front of a key congressional committee, and almost immediately following that testimony, an exclusion process was established by Presidential Proclamation.Members of Congress can also facilitate specific interactions with the U.S. Trade Representative, the U.S. Department of Commerce, and other agencies charged with implementing trade tariff and quota exclusions to help facilitate the successful and expeditious review of constituent companies’ requests for exclusion, and then, if granted, expeditious implementation.
Another company we work with made the successful case that tariffs imposed on their products were having the perverse effect of putting his company out of business in favor of a Chinese supplier who had also infringed on his patents.Persistent status inquiries from Congress were required to get this case reviewed and approved.
Considering this in sum, remember in the midst of a broad, sweeping and highly charged trade policy and political landscape, there are specific avenues for companies to seek specific remedy if they meet the established criteria.WSW is expert on how to engage your Members of Congress to tell your story and to advocate for that specific relief.
About the Author
Winning Strategies Washington
Donna Mullins has nearly four decades of experience navigating Washington, DC, on behalf of constituents and clients. She is a master strategist with particular expertise in crisis management and Executive “C Suite” management. With her nearly twenty years of experience on Capitol Hill, Donna successfully guides clients in identifying opportunities and taking advantage of them; clients rely on Donna to help them determine what to ask, who to ask, and when to ask in order to advance their agenda.
Founded in 2001, WSW is an independent, bipartisan federal government relations and grants procurement firm. Our team of experienced professionals helps clients build and sustain their own unique presence in Washington to advance policy and funding priorities.WSW provides a full range of government relations services. From direct lobbying to federal grants procurement, strategic counsel to crisis management, government marketing to grassroots and grasstops advocacy, we’re your on-the-ground team in Washington, extending your reach and advancing your objectives. With our team’s combined 10+ decades of experience, we stand ready to make your DC presence as effective as possible.