GM Seeks Tariff Relief for Ventilator Parts
April 03 2020 - 5:24PM
Dow Jones News
By Katy Stech Ferek
WASHINGTON -- General Motors Co. is asking the Trump
administration to drop import tariffs on Chinese parts that the
auto maker needs to make ventilators, saying the levies will make
it more expensive to build desperately needed machines that can
save lives.
In a letter to the U.S. Trade Representative, GM officials asked
the federal government to grant exclusions for several categories
of ventilator parts made in China. The existing tariffs on
ventilator parts "could potentially impede the ability of GM and
other U.S. manufacturers to source parts for critical care
ventilators quickly, reliably, and at as reasonable a cost as
possible," said the letter, which was dated Tuesday and made public
Thursday.
A representative for the USTR's office didn't immediately
respond to a request for comment.
Federal trade officials worked with the U.S. Department of
Health and Human Services to make sure that some crucial medicines
and medical products could be imported without the extra tariffs.
U.S. officials said last month that they also determined to not
impose tariffs on oxygen masks and ventilators themselves.
In their letter, GM officials pointed out that tariffs remain on
several categories of components used to make ventilators
domestically, including filters parts, compressor silencers,
grommets and a power cord set.
In a statement Friday, the auto maker said that most of the
ventilator components would be sourced in the U.S. and North
America, and that the "outcome of the request will have no impact
on GM's commitment to this important effort."
The federal government began collecting extra tariffs on most of
the ventilator parts in September 2018. They are being tariffed at
a rate of 25%.
U.S. trade officials began collecting extra tariffs on some
Chinese-made goods in 2018 as part of their effort to pressure the
country's manufacturing community to stop stealing U.S.
intellectual property.
The shortage of ventilators used to treat patients suffering
with the disease caused by the new coronavirus has GM and other
major manufacturers scrambling to make more for strapped
hospitals.
The auto industry, like in times of past national crisis, has
stepped up to the plate, putting to use its ability to quickly
source among thousands of parts suppliers and ramp up production
quickly. Auto makers Ford Motor Co. and Tesla Inc. are also gearing
up to boost production.
On March 20, GM officials said they partnered with Ventec, a
small maker of ventilators, to begin making machines at its idled
2.6 million-square-foot factory in Kokomo, Ind. The effort will
employ about 1,000 U.S. workers, the company said.
Executives at Ventec turned over blueprints for the machines and
collaborated with GM purchasing managers to find the more than 700
parts needed for production. Some of those parts needed to come
from China, GM officials said.
Factory workers are expected to deliver the first ventilators in
April and ramp up to a manufacturing capacity of more than 10,000
ventilators a month.
President Trump's tariffs on Chinese goods have long been
unpopular with the U.S. business community, including auto
manufacturers. Several business leaders have called for the tariffs
to be scaled back to ease the economic crisis that has accompanied
the virus's spread.
--Anthony DeBarros contributed to this article.
Write to Katy Stech Ferek at katherine.stech@wsj.com
(END) Dow Jones Newswires
April 03, 2020 17:09 ET (21:09 GMT)
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