MISCELLANEOUS TARIFF BILL

Reserve MTB Solely for Inputs Not Available in U.S.; Exclude End-Product Petitions

ISSUE: Last year Congress passed legislation implementing a new procedure for processing and approving Miscellaneous Tariff Bill (MTB) petitions. MTBs provide duty relief on imported manufacturing inputs not available domestically, offering importers an aggregate savings of up to $500,000 annually per product of items approved under this system.

USIFI and NFI support the basic premise of the MTB as a competitiveness tool for U.S. manufacturers facing import duties on inputs not available in the United States. Unfortunately, with the excitement surrounding the renewal of the years-dormant MTB process, some importers are seeking to misuse the MTB process as a tool to eliminate or reduce duties on finished end-products. Doing so not only circumvents the clear intention and accepted use of the MTB process to make U.S. manufacturing more competitive, but serves as one-sided concession to global producers at the expense of U.S. manufacturers and free trade agreement (FTA) partners.

Under the MTB process currently underway, more than 100 petitions were filed on end products under Chapters 61, 62, and 63 alone (apparel and made-up textile articles). Examples include:

  • Tents
  • Pet collars, leashes, and harnesses
  • Tote bags
  • Denim jackets
  • Man-made fiber woven shorts
  • Table runners and placemats

 

INTENDED USE OF THE MISCELLANEOUS TARIFF BILL:

Per the House Ways and Means Committee, the revised MTB process under the American Manufacturing Competitiveness Act (AMCA) is necessary because without it, “American manufacturers are forced to pay tariffs on the materials they need but are not made in the U.S.”1 Foreign made endproducts that go directly to market without further processing do not meet the standard of manufacturing materials, nor do they promote U.S. manufacturing in any way.

In fact, the AMCA explicitly states that Congress intends for the bill “to remove the competitive disadvantage to United States manufacturers and consumers and to promote the competitiveness of United States manufacturers….”2 Extending MTB benefits to end-products has the exact opposite effect. By giving foreign competitors advantageous duty breaks at the direct expense of U.S. producers, it makes U.S. manufacturing less competitive and deters investment in the sector.

ACTION REQUEST:

Congress must actively protect the integrity of the MTB process and longstanding U.S. trade policy by rejecting MTB petitions for end-products. Permitting end-products MTB status is inconsistent with Congress’s stated intention of the MTB, directly harms U.S. manufacturers, and undermines our FTAs by breaking faith with our free trade partners.

 

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1 See House Ways and Means Committee website https://waysandmeans.house.gov/competitive/

2 See American Manufacturing Competitiveness Act of 2016, PL 114-159, Sec. 2(b)