August 31, 2020

ITC to Investigate Supply Chain Challenges of COVID-19 Products

On August 21, the U.S. International Trade Commission (ITC) stated that it will conduct an investigation and prepare a report containing more detailed information on supply chain challenges and constraints for COVID-19-related products, including medical devices, personal protective equipment, and pharmaceuticals. Specifically, ITC’s investigation and report will provide information on:

  • Key U.S. industry sectors producing COVID-19-related goods, including information on U.S. production, employment and trade.
  • Detailed case studies on key products (e.g., N95 respirators, ventilators, vaccines and COVID-19 test kits), particularly products with reported shortages in the first half of 2020 due to supply chain fragility, blockages or barriers.

The case studies will draw upon all available information, including information on key products, the U.S. market and manufacturing industry, and U.S. imports of finished goods and inputs. The case studies will also examine supply chain challenges and constraints, including factors (such as regulatory requirements) that may have inhibited domestic production and foreign trade barriers and restrictions affecting U.S. imports of finished goods or inputs needed for domestic production.

Companies importing COVID-19 products that are currently subject to duties — either based on their tariff classification or pursuant to the Section 301 retaliatory duties against Chinese origin goods — may want to take this opportunity to reiterate the impact those duties have on the U.S. health care industry, production of domestic products, and U.S. consumers. These companies may also want to draw attention to any shortages or inability to procure certain raw materials or finished products domestically. The ITC’s request for comments also presents a renewed opportunity to advocate on the breadth of COVID-19 products that may be outside of the ITC’s initial review. Also, for those companies that submitted Section 301 COVID-19 exclusion requests for products imported from China, this may be another opportunity to advocate that the administration exclude your product from Section 301 duties.

The investigation and report are intended to build on a first investigation by ITC that identified and examined tariffs on products needed to combat COVID-19. The purpose of the first investigation was to assist the U.S. House of Representatives’ Committee on Ways and Means and U.S. Senate Committee on Finance in addressing shortages in the domestic supply chain. The first report was released by the ITC on May 4, 2020.

The final report for the current investigation is scheduled to be completed by December 15, 2020 and will be made available to the public. There will also be a virtual public hearing in connection with the investigation on September 23, 2020. Requests to appear at the public hearing should be filed with the ITC Secretary by September 11, 2020.

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