Bipartisan Lawmakers Seek to Remove Tariffs on Infant Formula with Proposed Formula 3.0 Act
- On June 1, a group of bipartisan lawmakers led by Senator Mike Lee, R-UT, introduced the Formula 3.0 Act which would permanently remove tariffs and other trade restrictions on imported infant formula base powder. This bill follows the expiration of the Formula Act, an emergency measure signed into law by President Biden in July 2022 that temporarily removed tariffs on infant formula in response to the nationwide infant formula shortage. Proponents of the bill said the Formula 3.0 Act aims to address vulnerabilities in the domestic infant formula market highlighted by the shortage last year.
- As our readers likely recall, FDA issued a recall of powdered infant formula originating from Abbott Nutrition’s facility in Sturgis, Michigan in February 2022. At the time, the Abbott facility supplied 40% of the nation’s infant formula. The recall and subsequent shutdown of the facility resulted in a months-long infant formula supply shortage which drew attention to vulnerabilities in the domestic supply and to high tariffs and other obstacles imposed on imported infant formula.
- According to a 2022 report from the Congressional Research Service, imports of infant formula have increased substantially over the last decade, accounting for approximately 4.3 million kilograms (valued at $28.8 million) of domestic consumption in 2021. The most-favored-nation (MFN) tariff rate for these products typically ranges from 14.9% to 17.5%. Though tariffs were temporarily waived by the emergency measures enacted in July 2022, these measures have since expired.
© 2023 Keller and Heckman LLPNational Law Review, Volume XIII, Number 158
