Tariff Exemption Application Wave: Ford, Nestle and Other Companies Seek Relief from Proposed Tariffs

As the U.S. Trade Representative (USTR) considers next steps on multiple trade investigations, major retailers and manufacturers are actively pushing for tariff exemptions. These investigations involve 60 trading partners, and potential measures could impose tariffs on related imported goods.

This week, USTR held hearings on proposed tariffs stemming from investigations launched over the past year under Section 301 of the Trade Act of 1974. Potential measures include a 25% tariff on imports from Brazil and tariffs of 10% or 12.5% on goods from 60 trading partners. The latter stems from USTR's allegations that these countries have failed to effectively prevent products made with forced labor from entering the U.S. market.

Exclusion lists and public comment

In response to the two proposed tariff actions, USTR has published lists of exempted goods that would not be affected if the tariffs are implemented, including goods covered by the USMCA. Additionally, USTR has sought comments from interested parties to further refine the scope of the proposed tariffs.

Ahead of the hearings, more than 1,500 stakeholders, including industry associations and companies such as BJ's Wholesale Club and Ford Motor Company, submitted written responses seeking additional product exclusions. These requests cover a wide range of goods, including water filtration systems for Brita water pitchers, plastic injection molding machinery for appliance manufacturing, and toys and Christmas decorations.

Several companies stated that exclusions are necessary because certain goods lack domestic production capacity or sufficient supply in the United States. Below is a detailed breakdown by industry of the goods retailers and manufacturers are seeking to exempt from potential tariffs arising from the investigations.

Retail industry

Several retailers are seeking broad tariff exemptions across multiple categories, while others are requesting protection for single product types, such as salmon and olive oil.

Tractor Supply Company stated that the proposed forced labor tariffs would affect key sourcing markets for many of its products, which are either produced in limited quantities domestically or unavailable in the United States.

"Imposing additional tariffs on essential rural goods with no domestic production capacity will not eliminate those foreign practices," wrote Seth Estep, Executive Vice President and Chief Merchandising Officer of Tractor Supply. "Instead, it burdens a major U.S. retailer and its American customers without changing the underlying sourcing constraints."

Meanwhile, e-commerce giant eBay is calling for a blanket exemption for secondhand goods, as Section 301 tariffs are intended to target production practices involving forced labor.

"Imposing tariffs on the resale of secondhand goods sends no economic signal to the original producer, let alone has any impact on forced labor practices involved in the initial manufacturing of the goods," wrote Cathy Foster, eBay's Vice President of Global Government Relations and Public Policy. "The tariff penalizes the resale of the goods, not their production."

Food manufacturing industry

Food brands such as Mars, McCormick & Company, and Nestlé expressed similar views in their exclusion requests, noting that geographic and climatic conditions make it impossible to produce certain goods domestically in sufficient quantities to meet U.S. demand, making imports necessary.

For example, Nestlé stated that palm oil, primarily imported from Thailand and Malaysia, should be included in any proposed tariff exclusions because no equivalent quality substitute exists domestically.

In its petition seeking exclusions for a variety of spices and herbs, McCormick not only argued that exclusions are necessary due to insufficient domestic supply but also noted that exclusions would "promote the efficiency of the U.S. food ingredient manufacturing industry."

Automotive manufacturing industry

In the tariff proposals related to the investigations, USTR stated that goods subject to Section 232 tariffs, such as automobiles, trucks, buses, and automotive parts, would be exempt.

However, automakers are seeking additional protections, primarily to support the continued build-out of U.S. manufacturing capabilities in advanced technology areas such as electric vehicles and battery energy storage.

Tesla noted that although it is actively investing in domestic production and reshoring, "this transition takes time."

"Without continued access to mature international supply chains, certain critical inputs cannot currently be sourced at the scale and quality needed to sustain the competitiveness of U.S. manufacturing," the company wrote.

Electronics and home appliance manufacturing industry

A variety of requests have been made in the electronics and home appliance manufacturing sectors. Some companies, such as appliance makers Electrolux Consumer Products and Conair, are seeking exclusions for finished products like hair dryers and curling irons, as well as specialized components needed for production.

"In many cases, highly specialized motors, compressors, electronic controllers, semiconductors, wiring harnesses, specialty steel products, and other critical inputs must be sourced globally to maintain efficient production and meet consumer demand," wrote Diane Burke, Acting General Counsel of Electrolux.

Similarly, GE Appliances is seeking protection for equipment used in manufacturing its products, such as specialized machinery, automation systems, molds, and capital equipment. The company specifically noted that tariffs on such imports would raise production costs and weaken its ability to invest in the United States.

"Every dollar absorbed by unnecessary tariff costs is one less dollar available to expand U.S. manufacturing capacity or create more American jobs," wrote Jim Kiley, Director of Federal Government Affairs at GE Appliances.

Additionally, some companies have suggested broader adjustments to the proposed actions. Whirlpool Corporation requested a blanket exemption for companies in good standing with U.S. Customs and Border Protection's "Customs-Trade Partnership Against Terrorism" program, while Bissell Homecare, in addition to seeking exclusions for floor care products, also requested a lower tariff rate for Vietnam.

"Given Vietnam's domestic legal framework and its active participation in USTR bilateral consultations, Vietnam should fall closer to the 10% tariff tier rather than the 12.5% tier," wrote Joel Van Winkle, Vice President, General Counsel, and Secretary of Bissell.