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Reform of the Miscellaneous Tariff Bill Process Clears House and Is Expected to Receive Senate Approval

Posted By Administration, Thursday, May 12, 2016
Updated: Wednesday, May 11, 2016


by Melissa Proctor, Polsinelli, P.C.


On April 27, 2016, the United States House of Representatives voted 415 to 2 in favor of The American Manufacturing Competitiveness Act of 2016 (H.R. 4923), which would fundamentally change the Miscellaneous Tariff Bill ("MTB") process in which duties on imports of certain goods into the United States are temporarily suspended or reduced for a three-year period. If no subsequent MTB legislation is passed, the preferential tariff treatment will expire – the last MTB legislation expired in 2012. U.S. importers and manufacturers generally favor MTBs because they allow finished goods to be produced in the United States at significantly lower costs and such savings can be passed along to the consumer. In addition, MTBs are viewed as making U.S. goods more competitive in international markets. The National Association of Manufacturers ("NAM") has stated that the expiration of the last MTB legislation in 2012 has cost U.S. manufacturers approximately $2.5 billion. In fact, NAM and more than 200 trade groups and manufacturers signed a letter urging Congress to act quickly on the bill. The bill will now move on to the U.S. Senate for consideration.

By way of background, temporary duty suspensions by Congress have been in existence for decades. Currently, the MTB process begins when individual members of Congress are lobbied to introduce duty suspension bills on specific goods. These bills are then subjected to review by the International Trade Commission ("ITC") and the executive branch to ensure that the imported items: (1) are non-controversial (i.e., they are not readily available from a U.S. source); (2) cost less than $500,000; and, (3) may be administered by U.S. Customs and Border Protection. If all three conditions can be satisfied, the individual bills are inserted into larger miscellaneous tariff bills by the House Ways and Means and Senate Finance Committees.

H.R. 4923 would create a new, multi-step process in which individual beneficiaries, such as U.S. importers and manufacturers, would submit written petitions to the ITC requesting that certain products be afforded MTB treatment. The ITC would solicit public comments on the petitions, conduct an analysis assessing the extent to which all three of the above-referenced conditions can be met (i.e., imported items are non-controversial, less than $500,000, and can be managed by CBP) and issue a report to Congress with its recommendations. Thereafter, the House Ways and Means Committees would review the ITC's report, draft a formal MTB proposal, certify that there are no spending earmarks, and publish a list of tax cuts that benefit ten or fewer businesses (i.e., limited tariff benefits). It should be noted that MTB proposals may exclude products that were part of the original petitions, but they cannot add any new items that were not reviewed by the ITC. The proposal would then move on to the House for consideration.

The Senate, which may begin consideration of the bill within the week, is reportedly expected to pass the legislation.


Melissa Proctor is a Shareholder with Polsinelli, P.C. With significant experience in the customs laws and regulations, export controls, economic sanctions, and international trade, Melissa is committed to understanding companies' operations and providing assistance geared toward helping them reach their specific business and operational goals. She may be reached at (602) 650-2002 or via e-mail at mproctor@polsinelli.com.

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Tags:  American Manufacturing Competitiveness Act of 2016  Miscellaneous Tariff Bill (MTB) 

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