U.S. should drop tariffs on pandemic-related goods for 90 days: key lawmaker

WASHINGTON (Reuters) - The U.S. government should suspend all tariffs on products needed to combat the coronavirus pandemic for 90 days and take steps to boost domestic production of medical supplies and drugs, a key U.S. lawmaker said on Monday.

FILE PHOTO: U.S. Congressman Richard Neal speaks during a meeting with Ireland's Foreign Minister Simon Coveney at Iveagh House in Dublin, Ireland April 16, 2019. REUTERS/Clodagh Kilcoyne/File Photo

House Ways and Means Committee Chairman Richard Neal called the pandemic a “wake up call” that revealed serious deficiencies in U.S. medical supply chains, urging a major restructuring to improve readiness for future crises.

The U.S. International Trade Commission, an independent federal agency, on Monday released a comprehensive list of face masks, medical gloves, drugs and other items facing tariffs imposed on goods from China and other countries.

An internal U.S. government document projects a surge in coronavirus cases and a sharp rise in daily deaths to 3,000 people a day, the New York Times reported on Monday, up from around 2,000 now.

Neal said the total value of imports in 2019 for the 112 categories of relevant medical supplies such as testing kits, drugs and oxygen therapy equipment was $105.3 billion, although that includes some goods not related to the pandemic.

The majority of those goods entered the United States duty-free, but a substantial amount faced various tariffs ranging from 2.5% to as high as 30%, he said.

Neal, a Democrat, and Senate Finance Committee Chairman Chuck Grassley, a Republican, last month requested a quick report from the ITC, citing concerns about severe supply disruptions caused by the pandemic.

“The United States faces a public health crisis that has fully exposed the insecurity of our medical supply chains and the dangers of our eroded manufacturing base. This emergency is a wake-up call,” Neal said in an analysis of the ITC report.

“To prevent the dangerous supply shortfalls that we are experiencing now from happening again in the future, we need to improve the resilience of our critical supply chains and re-establish our industrial manufacturing base,” he said.

Neal said the health crisis had been exacerbated by a shortage in supplies, personal protective equipment (PPE), and medicines. Many U.S. companies were now stepping up to resolve the shortage, but the government should also remove impediments to the importation of needed goods, such as tariffs, he said.

The United States needs “a strategic restructuring of our medical supply chains,” he said. “Failure to do so will damage our country’s long-term economic strength and cost us American lives.”

He said a process created by U.S. Trade Representative Robert Lighthizer in March for waiving tariffs on medical products from China would take too long, and did not cover products from other countries that were also in short supply.

In addition to suspending tariffs on all goods needed to fight the pandemic, the Trump administration should take steps under the Defense Production Act to enable and incentivize domestic production of these goods, especially PPE, Neal said.

Reporting by Andrea Shalal; Additional reporting by David Lawder; Editing by Sandra Maler and Tom Brown