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US Senate Passes Miscellaneous Tariff Bill

by Mike Godfrey, Tax-News.com, Washington

16 May 2016


On May 10, the US Senate unanimously approved the renewal of the Miscellaneous Tariff Bill to provide import tariff cuts for manufacturers.

Having been approved by the House of Representatives on April 27 by a vote of 415 to 2, the bipartisan American Manufacturing Competitiveness Act of 2016 has been passed to President Barack Obama for his signature.

Renewal of the MTB, which last expired at the end of 2012, would eliminate or reduce import duties on hundreds of raw materials and intermediate products that are not produced or available in the United States. Without the MTB, manufacturers have been paying substantially higher tariffs on essential manufacturing inputs. According to the National Association of Manufacturers, US companies have been hit by around USD750m in additional duties each year since January 1, 2013.

To address concerns from some lawmakers – and in particular members of the Republican Party – that the MTB represents a spending "earmark," the new MTB process will be an "open and transparent process" by way of petitions made by domestic US businesses to the independent International Trade Commission (ITC) for tariff relief in conformity with MTB rules – including that there is no domestic production. The ITC will examine each individual request and submit its recommendations to Congress, which will then develop MTB legislation to be enacted into law.

Senate Finance Committee Chairman Orrin Hatch (R – Utah) applauded the passage of the bill, saying that "this legislation helps American manufacturers level the playing field through tariff relief which lowers production costs on parts that simply can't be found here at home. While long-overdue, this legislation represents a true bipartisan, bicameral commitment to helping our economy with more jobs, bigger paychecks, and a stronger American manufacturing base."

Ranking Member Ron Wyden (D – Oregon) added that the legislation "will cut import taxes that US manufactures pay, [and] is critical for American manufacturing, American jobs, and the American economy."

The American Apparel & Footwear Association (AAFA) noted that the bill's passage will be of immediate benefit to its members, who have used previous MTBs to temporarily reduce or eliminate duties on a variety of textiles and footwear inputs.

AAFA President & CEO Rick Helfenbein commented: "We congratulate Congress for moving so quickly to pass the MTB reform bill. This bill creates a transparent and easy to understand process that will enable US apparel, footwear, and textile companies to reduce tariff costs on inputs and other articles no longer available in the United States. The resulting savings will create American jobs, spur innovation, and benefit US families."

TAGS: tax | business | Manufacturing | law | tariffs | manufacturing | legislation | United States | import duty | trade

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