NCTO Advisory to the Trade — February 21, 2019
Miscellaneous Tariff Bill Duty Suspension

Miscellaneous Tariff Bill Duty Suspension


Since 1982, most Congresses have passed legislation called the Miscellaneous Tariff Bill to temporarily reduce or suspend tariffs on certain imported products and make technical corrections to U.S. tariff laws. The MTB duty suspensions and reductions are designed to boost the competitiveness of U.S. manufacturers by lowering the cost of imported inputs without harming domestic firms that produce competing products.

Companies within NCTO’s membership benefit from MTB duty suspensions relating to certain animal hair fibers, such as camel hair and man-made fibers, such as certain acrylic and rayon, not available from a domestic U.S. source. The MTB also provides for suspension of duty on certain chemicals and textile machinery not available from a U.S. manufacturer. Overall, there are scores of individual duty suspension provisions that provide tariff relief to U.S. textile manufacturers. The duty suspensions now in effect will expire at the end of 2020 unless renewed.

Start NOW to prepare for renewal filings or new duty suspension filings

No later than October 15, 2019, the U.S. International Trade Commission (ITC) will open a web portal for submission of petitions for suspension of import duties. That web portal will be the only way to file petitions. Paper or email filings are not accepted, and Members of Congress no longer can initiate a request on behalf of a constituent. To be included in the next MTB, a tariff suspension must meet three criteria.

  1. It must be non-controversial, meaning that if a U.S. manufacturer of the article in question objects, the petition will be denied.
  2. The amount of tariff revenue foregone cannot exceed $500,000 per year per petition.
  3. Finally, the request must be administrable, meaning that Customs must be able to identify the subject merchandise when presented at the port. This is why, for example, a duty suspension cannot be granted based on the end use of the article and, rather, must be based on objective characteristics of the article.

In determining whether an MTB meets these criteria, each request undergoes a thorough vetting process by the ITC, the Department of Commerce, and U.S. Customs and Border Protection.

Companies seeking to renew any duty suspension they currently enjoy should start now to prepare their requests for renewal. Changes in the tariff schedule or in trade patterns sometime result an expected renewal request being redrafted as a new request. Further, should there be any question about the correct tariff classification of a fiber, interested companies should file now for a Customs Binding Ruling Letter. In the last round of suspension requests, one company had to wait eight months to get a Binding Ruling.

Responding to Requests for Duty Suspensions

In addition to preparing requests for duty suspensions on inputs not available domestically, U.S. textile manufacturers should also be prepared to oppose MTB requests for items that would undermine your U.S. production and employment.

Suggestions for Improving the Process

The law directs the ITC to report to Congress on the effects on the U.S. economy of duty suspensions. That report will include a broad assessment of the economic effects of such duty suspensions on producers, purchasers, and consumers in the U.S. The law also requires that the Commission solicit and append to the report recommendations with respect to those domestic industry sectors or specific domestic industries that might benefit from permanent duty suspensions.

As part of the ITC review process, NCTO will be expressing opposition to the inclusion of finished products, noting that they distort the intended premise of providing duty relief on inputs that undergo further processing by U.S. manufacturers. We will also be closely monitoring any report recommendation to make duty suspensions permanent. Temporary duty suspensions provide needed relief to U.S. manufacturers who must import raw materials not available domestically, while still leaving an incentive to return manufacturing to the U.S. With regard to products that have not been subject to longstanding duty suspensions, a hastily-enacted permanent suspension could dampen interest in reshoring that production and effectively remove that tariff classification from the list of articles that USTR can negotiate in future trade deals.

A public hearing will be held April 8, 2019. The deadline to file a request to appear at the hearing is March 18, 2019. The deadline for post-hearing briefs is April 15, 2019. The deadline for other written submissions is April 23, 2019. The report will be submitted to Congress by October 18, 2019.