Baby formula imports to face tariffs again in 2023

Imported baby formula would be subject to tariffs again in the new year after the expiration of exemptions implemented amid a nationwide shortage, the Wall Street Journal reported on Wednesday.

The shortage that began due to pandemic-induced supply chain issues worsened in February when Abbott Laboratories, the biggest U.S. supplier, recalled some products and closed a manufacturing plant after reports of bacterial infections.

U.S. health regulators relaxed import policies in response, and President Joe Biden invoked the Cold War-era Defense Production Act to shore up supplies.

FILE PHOTO: A selection of Enfa products, a brand of Reckitt Benckiser Group PLC, are seen on display in a store in Manhattan, New York City, U.S., March 24, 2022. REUTERS/Andrew Kelly/File Photo

The country has since shipped in millions of cans of emergency supplies from companies such as Nestle SA and Reckitt Benckiser.

According to the WSJ report, a White House spokesman said the tariff waivers doubled the number of manufacturers selling baby formula in the United States. The White House did not immediately respond to a Reuters request for comment.

Congress made the tariff waivers temporary as part of a deal to pass the measures quickly, the report said, citing people familiar with the matter.

In August, two big U.S. retailers, Walmart Inc and Target Corp said supplies of baby formula were improving. Still, Target had purchase restrictions on baby formula products both at its stores and online.

However, Reckitt in early December said it expects the U.S. infant formula shortage to “persist” until spring. It is the maker of the biggest brand in the market, Enfamil.

According to data firm IRI, in-stock rates at U.S. stores have continued to improve and are close to pre-recall levels at 86% now compared with 88%–90% before the recall.