When the U.S. grappled with a nationwide baby formula shortage in 2022, the Biden administration looked for solutions, but a new report from ProPublica shows one government agency made the process more difficult. One of the options for easing the shortage was to lift steep tariffs on baby formula imported from other countries.
The Biden administration’s lawyers had drawn up a proclamation to get rid of the import tax, but the Office of the United States Trade Representative said no.
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Eventually, Congress ended up temporarily suspending the tariffs anyway. However, the new report shows it took too long.
When arguing against suspending the tariffs, the USTR’s office cited concerns doing so would bring “lots of questions from domestic dairy producers.” That’s because cow’s milk is a primary ingredient for most baby formula and the dairy industry has long supported protections for U.S. manufacturers.
The USTR also said the shortage was caused more by a combination of transportation and shipping issues and people panic buying than an actual lack of production.
However, ProPublica details how the shortage’s main driver was Abbott Nutrition — one of the biggest U.S. formula makers — shutting down its largest plant and issuing several recalls over bacterial contamination in its products.
By the time Congress suspended the import taxes, 74% of the normally available baby formula in the U.S. was out of stock. In fact, the report found suspending those tariffs and importing formula helped ease the shortage significantly.
Now, the researchers behind that report are recommending Congress create a “trigger rule” that would automatically suspend import taxes if the market is substantially disrupted again.
A spokesperson with the USTR defended the decision to push back against suspending tariffs, telling ProPublica it was “committed to using all tools – including trade tools – to address the formula shortage and ensure American families were able to access infant formula,” and said “any implication that USTR stood in the way of addressing the crisis is completely false.”
WHEN THE U-S GRAPPLED WITH A NATIONWIDE BABY FORMULA SHORTAGE IN 20-22… THE BIDEN ADMINISTRATION LOOKED FOR SOLUTIONS – BUT A NEW REPORT FROM PROPUBLICA SHOWS ONE GOVERNMENT AGENCY MADE THAT MORE DIFFICULT.
ONE OF THE OPTIONS FOR EASING THE SHORTAGE WAS TO LIFT STEEP TARIFFS ON BABY FORMULA IMPORTED FROM OTHER COUNTRIES.
EVERYTHING WAS SET – THE BIDEN ADMINISTRATION’S LAWYERS HAD DRAWN UP A PROCLAMATION TO GET RID OF THE IMPORT TAX… BUT THE OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE SAID NO.
EVENTUALLY, CONGRESS ENDED UP TEMPORARILY SUSPENDING THE TARIFFS ANYWAY… BUT THE NEW REPORT SHOWS IT TOOK TOO LONG.
WHEN ARGUING AGAINST SUSPENDING THE TARIFFS… THE U-S-T-R’S OFFICE CITED CONCERNS DOING SO WOULD BRING QUOTE “LOTS OF QUESTIONS FROM DOMESTIC DAIRY PRODUCERS.”
THAT’S BECAUSE COW’S MILK IS A PRIMARY INGREDIENT FOR MOST BABY FORMULA – AND THE DAIRY INDUSTRY HAS LONG SUPPORTED PROTECTIONS FOR U-S MANUFACTURERS.
THE U-S-T-R ALSO SAID THE SHORTAGE WAS CAUSED MORE BY A COMBINATION OF TRANSPORTATION AND SHIPPING ISSUES AND PEOPLE PANIC BUYING – THAN AN ACTUAL LACK OF PRODUCTION.
HOWEVER, PROPUBLICA DETAILS HOW THE SHORTAGE’S MAIN DRIVER WAS ABBOTT NUTRITION – ONE OF THE BIGGEST U-S FORMULA MAKERS – SHUTTING DOWN ITS LARGEST PLANT AND ISSUING SEVERAL RECALLS OVER BACTERIAL CONTAMINATION IN ITS PRODUCTS.
BY THE TIME CONGRESS SUSPENDED THE IMPORT TAXES… 74 PERCENT OF THE NORMALLY-AVAILABLE BABY FORMULA IN THE U-S WAS OUT OF STOCK.
IN FACT, THE REPORT FOUND SUSPENDING THOSE TARIFFS AND IMPORTING FORMULA HELPED EASE THE SHORTAGE SIGNIFICANTLY.
NOW – THE RESEARCHERS BEHIND THAT REPORT ARE RECOMMENDING CONGRESS CREATE A SO-CALLED “TRIGGER RULE” – THAT WOULD AUTOMATICALLY SUSPEND IMPORT TAXES IF THE MARKET IS SUBSTANTIALLY DISRUPTED AGAIN.
A SPOKESPERSON WITH THE U-S-T-R DEFENDED THE DECISION TO PUSH BACK AGAINST SUSPENDING TARIFFS… TELLING “PRO PUBLICA” IT WAS QUOTE “COMMITTED TO USING ALL TOOLS – INCLUDING TRADE TOOLS – TO ADDRESS THE FORMULA SHORTAGE AND ENSURE AMERICAN FAMILIES WERE ABLE TO ACCESS INFANT FORMULA.”
AND SAID “ANY IMPLICATION THAT U-S-T-R STOOD IN THE WAY OF ADDRESSING THE CRISIS IS COMPLETELY FALSE.”
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