Guidelines for Responding to Supplier Price Increase Requests and Tariff Waiver for Research Equipment

You are receiving this message because you are on the P2P user list. Please note, this message pertains specifically to the research community as it provides guidance on tariff-free importation of scientific instruments and apparatus.

Scientific Equipment Tariff Waiver Process
Following our April memo on the new tariffs, we’re providing additional guidance specifically about scientific instruments and apparatus purchased from international vendors.
As an academic research institution, we can apply for tariff waivers on qualifying scientific
equipment. The process described below can help determine whether purchases qualify for tariff exclusion. Tariff costs fall to the department’s budget, so we want to outline steps you can take to potentially reduce these expenses. Tariffs may have a significant financial impact ranging from 10%– 35% (or more). In some cases, we are receiving a very short notification period from suppliers about the imposition of tariffs and failure to seek this waiver may result in negative financial impact on the department’s budget.

Background
For many years, federal law has allowed for tariff-free importation of scientific instruments and apparatus when certain conditions are met:

• the item being imported is intended exclusively for educational purposes or pure scientific
  research use, and
• instruments or apparatus of “equivalent scientific value” are not being manufactured in the
  United States.

General purpose equipment, including general purpose computers, do not qualify. Also, items used for nonscientific or noneducational purposes do not qualify. For example, instruments used for routine patient diagnosis or care would not qualify, but instruments used for clinical research could qualify.

Institutions can complete a short application for review by the U.S. Department of Commerce to
obtain tariff-free treatment of these imports, which involves a public notice and comment period, followed by Department of Commerce analysis. The entire process can take months, but the importation of the scientific instrument or apparatus does not need to wait until the completion of the process.

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Dear Valued Business Partners,

This is a follow-up to the communication we sent on April 14, 2025. Purchasing has received numerous requests for further assistance through priceincrease@urmc.rochester.edu.
Based on the specific situations shared by each department, we offer additional guidance
below:

• First and foremost, Do Not accept any price increases related to tariff changes
  without proper justification from suppliers and validation by UR, in accordance with the Round 1 guidelines on 4/14/2025.
• Explore Alternatives
  Investigate whether alternative products or suppliers are available from the U.S. or
  other countries with lower or no tariffs.
• Postpone shipments or reduce the orders
  If feasible, delay the shipment of goods. Given the volatility of tariff changes, there is
  a possibility that the tariffs could be lifted in the coming weeks or months.
• Track Tariff-Related Surcharges Separately
  If the tariff is deemed applicable, request that the supplier itemize the tariff as a
  separate surcharge line rather than including it in the base price. This approach will
  help us clearly track the financial impact and potentially recover costs if tariffs are
  later lifted or retroactive credits/refunds become available.
• Confirm Delivery Timelines
  If your product is business-critical and time-sensitive, be sure to confirm delivery schedules in advance and request regular updates throughout the logistics process.
  Tariffs can lead to delays in customs clearance. In addition, the increased import costs may prompt suppliers to maintain lower inventory levels, potentially impacting their ability to fulfill orders promptly.
• Other recommendations to off-set the impact:
  • Request a reduced rate if we agree to extend the contract term for additional
    years, at a fixed price.
  • Request a not-to-exceed cap, recommend 2.5%, or reach out to Purchasing for
    a specific recommendation.
  • Request supplier to absorb the freight costs, if UR is paying the freight.
  • Request a 60-day payment term.

If your department is considering additional mitigation strategies or facing unique challenges, please share them with us through priceincrease@urmc.rochester.edu, so we can provide further guidance or support.

______________________________________________________________________

As you’ve seen, the recent market turbulence following the newly announced tariffs and other cost inflation has led to an increase in supplier requests for price adjustments. Please note that we should not accept any price increases without proper justification from the suppliers.

Should you receive notification from suppliers regarding price increases, due to tariff or other reasons, please do not immediately accept these cost increases. Please respond to suppliers and request detailed justification for any proposed increases. Based on the supplier’s response to your request for information, use your best judgment to assess whether the justification is valid. If it doesn’t seem reasonable, please push back or escalate to the Purchasing team for support with further negotiations. We also encourage your team to identify other alternatives to mitigate the impact.

If you need any further assistance, please contact the Purchasing team at
PriceIncrease@URMC.Rochester.edu with Subject title “Recent Price Increase Request” along with all necessary correspondence from suppliers.

Suggested response to Suppliers to request justification for price increases:

We have recently received your notification regarding price increases. We must ensure that any price adjustments are fully justified and transparent.

To this end, we kindly request that you provide the following information:

1. Detailed Justification: Please provide a comprehensive explanation of the reasons for the price increase, including specific details on how the new tariffs have directly
   impacted your costs.
2. Calculations: We require a detailed breakdown of the calculations used to determine
   the price increase. This should include the specific tariffs applied, the affected
   materials or products, and the percentage increase attributed to each factor.
3. Mitigation Plan: Please outline any strategies or measures you are implementing to
   manage costs and minimize the need for price increases.

We value our partnership and are committed to working collaboratively to navigate these
challenges. By providing the requested information, you will help us better understand the situation and explore potential solutions together.

Please submit the requested documentation by [specific deadline, e.g., within 5 business days] to ensure a timely review and response.

Thank you for your cooperation and understanding. We look forward to your prompt response.