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US Starts Imposing China Medtech Tariffs

The US Trade Representative’s Office is offering a way for medtech companies and other firms to request product exclusions from 25% tariffs on China imports into the US that took effect on July 6.

The Trump administration continued to cite “China’s unfair trade practices” in officially starting to apply the additional tax on a list of China-made technologies on Friday. Medtech items worth $836m, winnowed down from a broader roster, remain on the tariffs list, according to AdvaMed, despite industry protests. (Also see "US Trade Rep Cuts 22 China-Made Devices From Tariffs List, But Retains 27" - Medtech Insight, 15 Jun, 2018.)

But AdvaMed’s member companies are “looking into the exclusions process" that was announced by the administration late Friday, Ralph Ives, the group’s executive VP, global strategy and analysis, told  Medtech Insight July 9.

“When USTR proposed in April to impose an additional 25% tariff on $50bn worth of imports from China, it included about $2.8bn in medtech. We sought to remove medtech from the Sec. 301 action due to concerns about the adverse effects on our competitiveness, as well as the potential longer-term impact on patient access to medical technology,” Ives said July 6.

“AdvaMed strongly opposes tariffs … and has proposed specific actions to resolve outstanding issues. We will continue to work with Washington and Beijing to convey our views on important trade-related matters,” Ives commented.

MITA Called For Exemption Process

It is likely that many MITA members, which are medical imaging equipment and radiopharmaceutical manufacturers, will try to leverage the USTR’s exemption process for their products.

“In fact, for us, the process is already in play,” a MITA spokeswoman said Monday. The remaining list of devices targeted for tariffs are primarily composed of X-ray, computed tomography, and MRI equipment, although the US also wants to tax imported pacemakers, electro-surgical instruments, and optical instruments.

 

The USTR China Tariffs exclusion process “is already in play” for Medical Imaging & Technology Alliance members, a MITA spokeswoman said July 9.

 

MITA had already issued a statement early Friday (likely just prior to the USTR announcement on the exclusions methodology), saying it was “calling on the Trump Administration to establish a timely and robust exemption process for medical imaging product and components from China Section 301 tariffs.” It seems MITA’s wish has come true, with the most recent trade office act.

USTR Will Consider If Product Available Outside China, Economic Harms

The process for requesting exclusions is outlined in a  Federal Register notice  released July 6 by USTR, which should be formally published sometime this week.

In making its determinations about granting product exclusions, the trade office may “consider whether a product is available from a source outside of China, whether the additional duties would cause severe economic harm to the requestor or other US interests, and which the particular product is strategically important or related to Chinese industrial programs including, ‘Made in China 2025,’" USTR stated July 6.

Other features of the process are that the public will have 90 days to file a request for a product exclusion, and the request period will end on Oct. 9; the public will have 14 days after the  Federal Register formal posting to file responses to the “request for product exclusion.” Interested persons will have an additional seven days to reply to any responses received in support of, or opposition to, the request. Also, the exclusion will be effective for one year, and will apply retroactively to July 6, 2018, USTR wrote.

From the editors of The Gray Sheet

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