American importers can ask for an exemption from President Donald Trump’s tariffs on steel and aluminum, and his first two rounds of tariffs on Chinese goods.
But they’re stuck paying duties if a product they import from China was included in Trump’s most recent round of tariffs imposed in September, which covered $200 billion worth of goods including food seasonings, hats, furniture, network routers and industrial machine parts.
The process to request an exemption has not yet been set up by the administration, nearly a month later, despite a new plea from 167 members of Congress.
“The lack of such a process for this most recent list is a glaring omission, particularly given its size in relation to the first two lists,” the bipartisan group of House members wrote in a letter sent to US Trade Representative Robert Lighthizer this week.
The US Trade Representative’s Office tells CNN that it has no announcement about opening up the exclusion process at this time. For the previous two rounds of tariffs on Chinese goods, USTR announced that they would establish an exclusion process at least a week before the tariffs took effect.
“It would be nice to have the ability to speak for our industry, to explain how we don’t have an easy option to switch production somewhere else,” said Tiffany Zarfas Williams, who owns the Luggage Shop of Lubbock with her husband in Texas.
Zarfas Williams estimates that 84% of the products currently in the store come from China, and most of them — including all backpacks, briefcases and luggage — have been hit with a 10% tariff.
She said that her biggest vendor has already raised prices, and that she’s had to pass that on to her customers.
Trump has repeatedly suggested that China pays the tariffs, saying they will bring “a lot of money” into US coffers. But tariffs imposed on foreign goods work by making those products more expensive, evening the playing field for similar items made domestically — and they’re paid for by American importers, putting those businesses at risk of seeing profits shrink or folding altogether.
“Some companies can absorb a 10% tariff, but for others a 10% increase would eat up their entire profit,” said Tom Gould, senior director of customs and international trade at Sandler, Travis & Rosenberg.
“They’re absolutely frustrated that this exclusion process isn’t in place,” he said.
Renegotiating trade practices has become a central tenet of Trump’s presidency. He pushed ahead with tariffs even at the cost of losing his top economic adviser Gary Cohn, who resigned in the wake of a fierce disagreement over tariffs on steel and aluminum.
Trump has argued that his tariffs have successfully pressured countries to negotiate. Earlier this month, he mocked politicians opposed to tariffs as “babies,” during remarks about the new trade deal with Canada and Mexico, which he said would not have happened without the tariffs.
But negotiations with China stalled after the latest round of tariffs went into effect.
His administration imposed a 25% tariff on $34 billion of Chinese goods in July and $16 billion of goods in August. The latest round of China tariffs started at a 10% rate and is set to increase to 25% at the end of the year.
On a call with reporters last month, a USTR official noted that the proposed list of goods for this round came out in July, giving businesses almost six months to prepare before the tariff would go to 25%.
The Trump administration wants to pressure China to stop engaging in what it calls unfair trading practices, but created the exclusion process to keep the duties from putting American businesses at a competitive disadvantage.
While the exclusion process is available to importers affected by the first two rounds of tariffs on Chinese goods, it has not been a quick process for businesses seeking relief.
None of the roughly 3,000 exclusion requests submitted to USTR to date have been granted. About 500 have been denied, according to USTR documents.
When evaluating a request, USTR considers whether the item is available only from China, whether the tariff would cause “severe economic harm” to the company, and whether the particular product is strategically important to China’s industrial programs.
An exclusion only offers relief for one year, but it could give a business time to find an alternate supplier. That process is likely to take several months, or longer if a new factory has to be set up outside China.
Some industries avoided the issue entirely after USTR removed nearly 300 items, including smartwatches, bike helmets, and highchairs, from the latest list following a public comment period held before they took effect.
Winners included Apple, which was spared after lobbying to remove some items. It narrowly missed having to pay duties on Apple Watches and Air Pods.
But Zarfas Williams doesn’t have the resources of a major company like Apple.
“I feel like we’ll be OK through Christmas. But if the tariff goes up to 25% on January 1, that will be a whole different story,” Zarfas Williams said.
How are trade tensions affecting your business? Share your story with CNN here.