President Trump Announces Duty Deferral Program Ushering in Temporary Relief for Qualifying Importers

April 19, 2020

President Trump issued an Executive Order today authorizing temporary relief of the payment of certain duties, interest and fees associated with imported merchandise.

The order specifically calls for 90 days of deferral for regular tariffs – known as “most-favored-nation” (MFN) tariffs, for importers who can establish that they are experiencing significant financial hardship related to the COVID-19 outbreak.

The President’s Executive Order does not extend to tariffs imposed for remedial purposes, such as Section 201 safeguard duties on solar cells and modules and washing machines, Section 232 steel ad aluminum tariffs, and Section 301 tariffs applicable to imports from China and certain European Union products.  The EO does not defer the collection of antidumping and countervailing duties.

According to an April 22 Federal Register notice drafted jointly by U.S. Customs and Border Protection and the Department of the Treasury, as well as April 19 CBP guidance, this temporary postponement applies to formal entries of merchandise entered in March or April 2020.  CBP will not return deposits of estimated duties, taxes, and fees that have already been paid.

To qualify for significant financial hardship, an importer must demonstrate to CBP that:

  1. the importer’s operations are either fully or partially suspended during March 2020 or April 2020 due to orders from a competent governmental authority limiting commerce, travel, or group meetings due to COVID-19; and
  2. the gross receipts of such importer for March 13-31, 2020 or April 2020 are less than 60 percent of the gross receipts for the comparable period in 2019.

Importantly for the importing community, CBP’s guidance establishes that no interest will accrue and that no penalty, liquidated damages or other sanctions will be imposed for the postponed payment of estimated duties, taxes, and fees during the 90-day deferral period.

For more information, CBP has issued a FAQ.