Faegre Drinker Biddle & Reath LLP

Despite reports from earlier this week that President Trump would issue an executive order deferring Most-Favored Nation (MFN) tariffs on imports from certain countries for 90 days, this morning White House economic adviser Larry Kudlow stated the administration has changed course for now and decided against the tariff deferrals. Kudlow attributed the turnaround to the complexity of administering such a plan.

As background to this latest development, following strong expression for tariff relief from business groups and lawmakers, the administration considered deferrals for MFN tariffs, with certain exemptions — specifically, Chinese tariffs assessed under Section 301 and aluminum and steel covered by Section 232. In addition, retaliatory duties on imports from the European Union as a result of the Airbus dispute would remain in place.

Not surprising, the prospect of these deferrals taking effect sparked sharp criticism from domestic industry associations and unions, which most likely played a key role in derailing the tariff deferrals. In the meantime, stay tuned as the President commonly shifts position.