Miscellaneous Tariff Bill Filed

On November 9, 2017, House Ways and Means Chairman Kevin Brady (R-TX), Ranking Member Richard Neal (D-MA), Senate Finance Committee Chairman Orrin Hatch (R-UT), and Ranking Member Ron Wyden (D-OR) introduced the bipartisan, bicameral Miscellaneous Tariff Bill Act of 2017 (MTB) (H.R. 4318). After reviewing the U.S. International Trade Commission (ITC)’s final report to Congress, the lawmakers have prepared this legislation to implement the ITC’s recommendations.

Background: Last year, Congress overwhelmingly passed the bipartisan American Manufacturing Competitiveness Act of 2016 (AMCA) to establish an open and transparent process for consideration of the MTB. Pursuant to the AMCA, American businesses were able to petition for tariff relief from the ITC. The ITC then determined whether each petition met the requirements of the AMCA, including the requirement that there be no domestic producer of a like product who objects to the tariff reduction or suspension at issue. In August, the ITC, with input from DOC and CBP, provided a final report to Congress that included recommendations concerning more than 2,500 petitions. The ITC recommended that more than 1,800 of the petitions be included in MTB legislation to be considered by Congress. The Committees have reviewed the ITC’s final report and prepared this legislation to implement the ITC’s recommendations. Pursuant to the AMCA, Congress may not include products that were not recommended by the ITC, and only non-controversial provisions will be included in the MTB.

Some observations by Agathon Associates --

• The bill is huge, 510 pages in length, with 1675 individual duty suspension or reduction provisions.
• For the first time in several years Congress has undertaken a complete repeal and replacement of the Chapter 99 Subchapter II duty suspensions and reductions. Many hundreds of provisions expired at the end of 2012 but are still printed in the 2017 Harmonized Tariff Schedule of the United States ("HTSUS"), and to make it even more confusing, provisions that expired at the end of 2009 and 2006 are also still listed. Currently all provisions have expired, and Congress, in Section 1 of the bill, strikes out all of them and replaces them with the new ones. We welcome this clearing up of the HTSUS.
• Because the old duty suspensions and reductions were the results of various bills passed at different times and with the order of the provisions of the bills relating more to the happenstances of the dates they were filed, the was, in Chapter 99 Subchapter II, no logical order to the provisions, so if you wanted to find a provision relating to, say, rayon staple fiber, you'd have to start at the beginning and read straight through to the end to be sure of finding all relevant provisions. In this bill Congress put the duty suspensions and reductions in order by HTSUS classification number. So, for example, to find all provisions for rayon staple fiber, you can start as the first provision that begins with the "55" and stop once you get to a provision for staple yarn.
• On the question of whether the MTB should (1) be solely a vehicle to promote American Manufacturing Competitiveness (which after is the name of the law that created this process) by providing duty relief to manufacturers who import inputs not available domestically or (2) provide duty relief for anyone importing articles not available domestically, including end-use consumer products, Congress in this bill chose the latter. Among the consumer articles included are certain:
  • Articles of knit apparel,
  • Articles of non-knit apparel,
  • Hats, and
  • Footwear.
• TIMING. The amendments made by this Act apply to goods entered, or withdrawn from warehouse for consumption, on or after the 30th day after the date of the enactment of this Act.

Clients of Agathon Associates can get more details at http://www.agathonassociates.com/textile-pri/mtb/index.htm. You will need to enter your username and password. If you do not know your username and password email David Trumbull at david@agathonassociates.com.