US Miscellaneous Tariff Bill: A Breakdown
The original Miscellaneous Tariff Bill (MTB) legislation was introduced in the early 1980s, with two main goals. The first was to help US manufacturers compete both at home and abroad by temporarily reducing or suspending import tariffs. The second, is to give importers a means to request other technical corrections to the Harmonized Tariff System of the United States (HTSUS).
In general, MTB requests should be non-controversial, meaning, there should be no domestic production or opposition from domestic US producers and requests should not create excess revenue losses for the United States.
Regulatory Bodies Tasked With Upholding The MTB
Until the recent enactment of the American Manufacturing Competitiveness Act of 2016 (AMCA), the House of Representatives’ Committee on Ways and Means had initial jurisdiction over the tariff schedule and corrections to trade legislation. The AMCA provides a new process for determining which product will be included in an MTB to be fully vetted through a transparent and fair process. Under the new process, the US International Trade Commission (USITC) is tasked with collecting and publishing the product petitions, receiving public comments on those petitions, and coordinating with the Department of Commerce (DOC).
The DOC is tasked with providing input for the administration and delivering a report to the House Ways and Means Committee, the Senate Finance Committee and the USITC. The report contains findings relative to the determinations of domestic production and any objections from domestic producer(s) of the product subject to the petition. The DOC’s report also includes technical changes to the product’s article description, needed when products are presented for importation, and the input of the US Customs Border and Protection (CBP) agency and any other relevant agencies.
Following the DOC report, the USITC is responsible for determining whether or not the product petition should go forward. The USITC submits a preliminary report to the congressional committees and provides information related to each product petition. At a minimum, the USITC report contains a determination of whether domestic production of the product exists; whether a domestic producer objects to the petition; any technical changes to the product’s article description that are needed for purposes of administration; an estimated loss in revenue if duty suspension or reduction takes effect; and a list of petitions that it does not recommend for inclusion in an MTB, if applicable.
Present Status of The Miscellaneous Tariff Bill
The current MTB process in well under way. From October 14 to December 12, 2016, the USITC launched the MTB portal and opened it for the submission of petitions. From January 11 to February 24, 2017, the USITC complied petitions and collected public comments. The DOC has issued its report on the petitions and, as of April 10, 2017, the report is pending before the USITC.
The report includes CBP’s comments on whether each petition includes an administrable article description and the HTSUS subheading. CBP noted that many of the article descriptions, if implemented, will require further verification and importers should be prepared to provide additional information necessary to allow CBP to determine the identity and proper tariff classification. The DOC has also included a list article descriptions from the petition that may include products subject to anti-dumping duty (ADD) or countervailing duty (CVD).
Prior MTBs have been dominated by material inputs such as chemicals or other sub-components. In review of the petitions submitted in 2016, there’s a wide assortment of products. Pending petitions include a range of diverse products such as chemicals, articles of plastic and leather goods, furniture and vehicles to meat and wearing apparel. Critics have noticed an influx of finished products which seems to be contrary to the spirit of the MTB.
Non-petitioners should be encouraged to review the list of petitioned products to determine opportunities they can take advantage of, and temporarily lower their import duties.
Between April and June 2017, the USITC will conduct their review, take in the considerations from the DOC report and deliver its own preliminary report to the congressional committees. Based on information submitted by the congressional committees, the USITC will re-review individual petitions from June through August 2017 and then issue its final report to the congressional committee.
Once the MTB passes, the temporary duty suspensions or reductions will be included in an amendment of the Harmonized Tariff Schedule of the United States, chapter 99, subchapter II for a period not to exceed three years. The process will repeat again no later than October 15, 2019.
The timeline for the MTB process is approximately 300 days from beginning to end. The 2017 petitions list, as well guidelines and tools to assist you on MTB filing procedures, can be found on the USITC website.
Dana Pontia is a senior international trade consultant at Livingston International.