Senate Passes Miscellaneous Tariff Bill Act of 2018

Enhancing Chemical Security and CFATS

On July 26, the U.S. Senate approved the Miscellaneous Tariff Bill Act of 2018 by a voice vote with amendments offered by Finance Committee Chair Orrin Hatch (R-UT). The measure now returns to the U.S. House of Representatives. If the House concurs with the Senate amendments, the legislation would be cleared for the president’s signature. At this writing, the House hadn’t scheduled action yet on this amended bill.

The bill, H.R. 4318, amends the Harmonized Tariff Schedule of the United States to temporarily modify certain rates of duty for provisions recommended by the International Trade Commission (ITC) pursuant to the new process established in the American Manufacturing and Competitiveness Act of 2016. The legislation includes more than 1,600 products that were recommended by the ITC. The legislation, as approved by the Senate, contains several chemicals of interest to coatings manufacturers, including Industrial grade nitrocellulose and heat-curable epoxy resin mixture.

Through the Miscellaneous Tariff Bill (MTB), Congress temporarily suspends or reduces tariffs on certain imports for three years. Most of these duty suspensions relate to chemicals or other inputs used by U.S. manufacturers, who assert that the tariff relief provided by the MTB helps reduce their manufacturing costs, thus making their products more competitive. The tariff changes contained in this bill will apply to goods imported or shipped 30 days after the bill’s enactment.

Criteria for MTB consideration are that each duty suspension must be noncontroversial (e.g., no domestic producer or Member objects); revenue-neutral (foregone tariffs of no more than $500,000 per product in a calendar year); and administrable by U.S. Customs and Border Protection. The MTB offers only temporary, not permanent, relief from tariffs, maintaining an incentive for companies to develop the capability to manufacture these products in the United States.

Congress passed the American Manufacturing Competitiveness Act of 2016 to establish an open and transparent process for consideration of the MTB. This bill established a three-step process that allowed companies to petition the ITC, an independent and non-partisan independent agency. The process begins with petitions from interested parties, after which, the public and the Administration provides comments to the ITC, which then conducts an analysis. Following that, the ITC issues a public report to Congress with its analysis and recommendations regarding products that meet the process bill’s standards.

Finally, the House Ways and Means Committee examines the ITC’s recommendations and drafts legislation implementing those recommendations. While the committee can exclude products from its bill, it cannot add products that were not recommended by the ITC. Congress then considers the MTB.

In August 2017, the ITC 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 (covering more than 1,600 products) be included in the legislation.

The ITC also indicates that although the current MTB petition cycle is now complete, the Act requires the Commission to conduct another MTB petition cycle that will begin no later than Oct.15, 2019.  This will provide the next opportunity for proposing additions to the list.

ACA has supported the miscellaneous tariff bill process, and along with many other businesses and trade organizations, wrote Congress in December 2017 in support of this legislation.

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