Update By NTRA's Rooney On Threatened US-Canada Tariffs

Amid the fluid nature of the threatened 25% tariff on Canadian goods (those subject to the United States-Mexico-Canada Agreement) entering the U.S. set to be enacted on April 2, one confusing aspect has surrounded just how long a horse entering the U.S. from Canada can reside in the country before a tariff will be imposed.

As per the Harmonized Tariff Schedule of the United States, “We believe that horses from Canada can enter the United States for extended periods without paying duties under certain conditions,” said Tom Rooney, president and chief executive officer (CEO) of the National Thoroughbred Racing Association (NTRA), on Friday.

The NTRA subsequently issued a detailed FAQ on the proposed tariffs, which can be read here.

According to the NTRA, there are several conditions in which horses can enter the United States for extended periods without paying duties. These include:

Temporary Entry: Horses can be admitted under bond for exportation within one year from the date of importation, which may be extended up to a total of three years.

Duty-Free Status: Purebred breeding horses are classified under specific HTSUS subheadings 0101.21.0010 for males and 0101.21.0020 for females and have a duty-free status when imported permanently.

Temporary Import for Racing/Shows: Horses from the US which have been exhibited at recognized expositions in Canada, including racing and horse shows, and have not been in Canada for more than 90 days, are eligible to return to the US without Canadian health certificates.

The following is a more detailed breakdown of the difference between tariffs and veterinary requirements:

One-year temporary entry:

• Horses may be admittedwithout paying tariffs under bond for exportation within one year from the date of importation.
• This period may be extended, upon application, for one or more further periods which, when added to the initial one year, shall not exceed a total of three years.
• See HTSUS Chapter 98, subchapter 13 for more information here:Harmonized Tariff Schedule.

30-day temporary entry, which is for veterinary purposes, not tariffs:

• Horses can be imported from Canada for up to 30 dayswithout requiring a USDA veterinary port inspection or formal entry with U.S. Customs.
• This is the standard temporary entry period for horses from Canada.
• Horses must have an official Veterinary Health Certificate endorsed by a Canadian government veterinarian and a negative equine infectious anemia test.

Other Health Requirements: For stays longer than 30 days, horses will need an official health certificate of physical examination performed within 30 days of travel, endorsed by a Canadian government veterinarian, and a negative equine infectious anemia (EIA) test drawn within 180 days prior to export.

Rooney explained that he is working closely with the office of Kentucky Congressman Andy Barr to request a waiver on Canadian horses sent for sale in the U.S.

The NTRA's FAQ also dives into the weeds of tariffs. More specifically:

What are the mechanics of how the tariff is collected?  Is 25% of fair market value charged at the border crossing?  Who appraises fair market value, and what happens if that horse sells a week after it crosses the border for four times the declared value at a sale?

Answer: What matters for customs valuation is the value declared to customs upon importation.  If the owner of a horse imports the horse to the US, pays the duty on the declared value, and that horse later sells for four times the declared value, the owner generally would not be required to revise the declared value to customs because the sale occurred after entry and the entry was not made with a specific sale being contemplated.

Any duty is based on the declared value to US Customs.  For example, if the declared (or entered) value is $400,000, and the duty is 25%, the duty to be paid to U.S. Customs is $100,000 upon entry.

The FAQ, which once again can be read here, also delves into other aspects of the tariffs, including who imposes it, who collects it, and who is responsible for paying it.

As currently outlined, the blanket tariffs are scheduled to go into effect on April 2. In response, the Canadian government has threatened reciprocal tariffs against approximately $30-billion worth of imported goods into Canada.

While the initial round of retaliatory tariffs did not apply to purebred breeding and racehorses, future ones may well mirror those imposed by the U.S., the Canadian Thoroughbred Horse Society (CTHS) has warned.

On Wednesday, the California Thoroughbred Horse Society (CTHS) issued their own advisory on the impending tariffs.

Earlier in the week, Rooney (who formerly represented Florida's 16th congressional district) recommended that anyone with strong thoughts or concerns about the tariffs should contact their local representatives.

“If you get enough people calling saying 'the tariffs are really hurting,' then you start talking to your leadership. Then you start talking about that in committees. Then the people who are going over to the White House start talking to the people on the staff there, or even the president himself,” said Rooney.

“That does have an effect,” said Rooney. “It works.”