You are receiving this message because you are on the P2P user list. Please note, this message pertains specifically to the research community as it provides guidance on tariff-free importation of scientific instruments and apparatus.
Scientific Equipment Tariff Waiver Process
Following our April memo on the new tariffs, we’re providing additional guidance specifically about scientific instruments and apparatus purchased from international vendors.
As an academic research institution, we can apply for tariff waivers on qualifying scientific equipment. The process described below can help determine whether purchases qualify for tariff exclusion. Tariff costs fall to the department’s budget, so we want to outline steps you can take to potentially reduce these expenses. Tariffs may have a significant financial impact ranging from 10% – 35% (or more). In some cases, we are receiving a very short notification period from suppliers about the imposition of tariffs and failure to seek this waiver may result in negative financial impact to the department’s budget.
Background
For many years, federal law has allowed for tariff-free importation of scientific instruments and apparatus when certain conditions are met:
- the item being imported is intended exclusively for educational purposes or pure scientific research use, and
- instruments or apparatus of “equivalent scientific value” are not being manufactured in the United States.
General purpose equipment, including general purpose computers, do not qualify. Also, items used for nonscientific or noneducational purposes do not qualify. For example, instruments used for routine patient diagnosis or care would not qualify, but instruments used for clinical research could qualify.
Institutions can complete a short application for review by the U.S. Department of Commerce to obtain tariff-free treatment of these imports, which involves a public notice and comment period, followed by Department of Commerce analysis. The entire process can take months, but the importation of the scientific instrument or apparatus does not need to wait until the completion of the process.
Process
Department Responsibilities:
As the scientific experts, departments are best positioned to determine if their equipment qualifies for educational or scientific research purposes. Assess whether the equipment purchase may qualify for a tariff waiver by confirming the equipment meets the basic requirements above. Then use the guidance below to complete Form 338 with detailed technical explanations of why foreign manufacturers are preferable to U.S. alternatives and file the application directly with the U.S. Department of Commerce. Make sure you provide the following information:
- Product
- Value
- Origin location(s)
- Expected arrival date
- Whether there was an option to source this equipment from an American competitor
- Why you elected to purchase from an overseas supplier and what are the unique benefits of the overseas supplier
- Describe the scientific need for this equipment
- Current contract terms regarding cancellation, deposit, shipping, logistics or any similar/related issue
Supporting documents, which may include the order confirmation, contract, technical specifications showing unique benefits of the equipment, etc. should also be included.
Corporate Purchasing Responsibilities:
Corporate Purchasing will engage with Office of Counsel to support questions of law or unique circumstances for these exemption requests.
Grant Planning and Budgeting
Departments should incorporate tariffs into grant budgets and an initial analysis of the potential eligibility for tariff waiver should be performed prior to the grant submission where possible. Please contact Purchasing at the email address stated above for planning support.
Vendor Coordination and Contracting
It is important to note that the entities from which you purchase these items may not be aware of our ability to reduce these tariff costs. Please take time to discuss this issue with manufacturers as soon as you are able, as those organizations may have their own process to apply for tariff-free treatment. Relatedly, you may ask the manufacturers about other customers’ experience with tariffs and ask for the specific Harmonized Tariff Schedule of the United States (HTS) category applicable to the relevant equipment.
Corporate Purchasing and the Office of Counsel have devised contract terms and language to address the treatment of tariffs on future purchases with vendors. Please work with Corporate Purchasing to ensure vendor contracts contain the appropriate language relative to tariff surcharges.