MISCELLANEOUS TARIFF BILL

Tax Relief Needed on Manufacturing Inputs Not Available Domestically

ISSUE:

The Miscellaneous Tariff Bill (MTB) temporarily reduces or eliminates import duties on specified raw materials and intermediate products used in manufacturing that are not produced or available domestically. It also ensures that U.S. manufacturers are not at an unnecessary disadvantage to their foreign competitors when sourcing vital manufacturing components. Passing the MTB is a top priority for USIFI and NFI.

BACKGROUND:

The last MTB passed by Congress expired at the end of 2012. As a result, U.S. manufacturers pay an estimated $748 million in additional materials costs each year that the MTB issue remains unresolved. In addition, since the failure to approve an MTB ultimately undermines the competitiveness of domestic manufacturers, it is estimated that the broader cost to the U.S. economy is $1.86 billion annually.

In an effort to increase fairness in the MTB, Congress passed the American Manufacturing Competitiveness Act (AMCA) in 2016. The AMCA revived the MTB process by creating a new mechanism for submitting, reviewing, and objecting to petitions for duty relief under the MTB. Petitions are now submitted to the nonpartisan International Trade Commission (ITC) and then posted online for public comment. The ITC and Commerce Department work jointly to identify any domestic production of products that are the subject of petitions, and to review any public objections received.

A final list of petitions recommended for approval is then forwarded to Congress, where further petitions can be removed but not added. Once approved by Congress, MTBs are effective for a period of three years, after which the review and approval process begins again.

STATUS:

The ITC provided Congress with a list of recommended petitions for approval in August 2017. After months of congressional vetting, the House passed an MTB, H.R. 4318, containing 1,662 petitions on January 16, 2018. The Senate, however, has yet to act on this critical bill providing tax relief on an array of manufacturing inputs vital to many U.S. textile manufacturers, including different kinds of acrylic and rayon fibers, and various chemical compounds.

ACTION REQUEST:

• USIFI and NFI urge the Senate to pass the MTB as soon as possible, whether as a standalone bill or as part of a larger package.