Overview
The Trump Administration issued a proclamation on robotics and industrial machinery on October 28 which gives foreign robotics manufacturers additional reasons to apply for a conditional approval exemption from the Federal Communications Commission's (FCC) Covered List. The proclamation directs the Commerce Department and US Trade Representative to pursue trade negotiations regarding the import of robots and their components. However, the proclamation also states: "[d]epending on the status or outcome of such negotiations, I [President Trump] may consider alternative remedies in the future, including imposing or modifying tariffs, duties, quotas, and fees."
Thus, for companies already confronting the import restrictions on advanced robotics because of FCC's Covered List, the threat of tariffs may be an additional inducement to begin the conditional approval process to enable the import of covered foreign devices pending implementation of a US-onshoring plan.
At the same time, the Proclamation also contemplates "establishing a program to incentivize new investment in United States production of robotics and industrial machinery, as well as their parts and components."
Conditional approval exemption from the Covered List
The FCC's Covered List now includes foreign-produced advanced robotic devices, meaning that new such devices are effectively banned from being imported or marketed in the United States. Companies can apply for an exemption from the Covered List by submitting an application to be reviewed by the Department of War (DoW) describing their supply chains and US onshoring plans. The FCC has already announced several conditional approvals for advanced robots including for companies based in the European Union and Asia.
The existing drone framework provides a possible model for future tariff relief for robotics manufactures
The Administration's August 13 drone tariff proclamation could provide a model for how the Administration will handle future tariffs on robots, if it decides to impose them. In evaluating an onshoring plan for tariff relief for UAS/drones, the Commerce Department may consider whether the company has received a conditional approval with an approved onshoring plan. A future levy of tariffs or duties on robots could contain similar relief.
The drone proclamation also directs the Commerce Department to align its onshoring requirements with the FCC's conditional approval process. That approach provides a precedent for coordinating robotics tariff relief with the existing conditional approval process.
What robotics manufacturers should do now
Companies with new models of advanced robotic devices wishing to sell to US customers should therefore strongly consider filing for a conditional approval application. Preparation should include identifying the products for which approval will be sought, compiling relevant corporate ownership and supply chain information, and developing a credible US onshoring plan. Beginning that work now will provide companies with earlier US market access and relief from potential tariffs which are being considered by the Administration.
Steptoe's Telecom and International Trade attorneys can help steer companies that have an affected product through the conditional approval process.
