A decision on duty deferrals could save companies facing a liquidity crisis.
Nearly 400 CEOs of small, medium, and large-sized companies from across the country sent a letter to President Trump on Tuesday seeking his administration’s support for a proposal that would provide a deferral of duty payments for a limited amount of time.
The group, which includes many apparel industry companies, said this deferral is similar to what has been done for tax and other payments owed to the government, and would help these and other companies to preserve their cash flow, which is critically important during a prolonged period of little to no revenue.
Many firms have tapped into their credit facilities in recent weeks to meet the liquidity challenges created by the economic fallout stemming from the coronavirus pandemic. This has included sweeping store closures and slowdowns or shutdowns in manufacturing facilities.
The CEOs thanked Trump for the steps the administration has taken, including delaying many payments, such as income tax and student loans, giving Americans access to much-needed cash to help them survive these challenging times.
“In that vein, we are writing to ask for additional, urgent help this week,” the CEOs said. “We are urgently asking you to delay the collection of duties, including those that many companies were required to pay this past Friday, for a period of 90 to 180 days to give companies like ours access to cash that would normally be paid to the U.S. government.”
Customs & Border Protection had issued a delay on March 20, but then reversed course on March 26, notifying importers that such duty payments on their shipments would be due immediately. Trump has also said he wouldn’t cut tariffs due to the crisis.
“Delaying duties helps us preserve cash flow–critically important during a prolonged period of little to no revenue–allowing us to keep our businesses in operation so we can preserve U.S. jobs,” the CEOs said, even as companies, particularly retailers, have furloughed massive numbers of workers.
“At the same time, delaying duties does not undermine the effect of tariffs on trade flows because the money is still due,” they added. “Mr. President, only you can take this swift action. But in doing so, you would provide immediate relief to both large and small businesses, including manufacturers, retailers and other service providers, farmers and ranchers.”