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Tuesday, January 22, 2013

Miscellaneous Tariff Bills: Overview and Issues for Congress

Vivian C. Jones
Specialist in International Trade and Finance

U.S. importers often request that Members of Congress introduce bills seeking to temporarily suspend or reduce tariffs on certain imports. The vast majority of these bills address chemicals, raw materials, or other components used as inputs in the manufacturing process. The rationale for these requests, in general, is that they help domestic producers of the downstream goods reduce costs, thus making their products more competitive. In turn, these cost reductions may be passed on to the consumer.

In recent congressional practice, the House Ways and Means and Senate Finance Committees, the committees of jurisdiction over tariffs, have combined individual duty suspension bills and other technical trade provisions into larger pieces of legislation known as miscellaneous trade (or tariff) bills (MTBs). Before inclusion in an MTB, the individual legislative proposals introduced by Members are reviewed by the trade subcommittee staff in each committee, the U.S. International Trade Commission (USITC), and executive branch agencies to ensure that they are noncontroversial (generally, that no domestic producer, Member, or government agency objects), relatively revenue-neutral (revenue loss due to the duty suspension of no more than $500,000 per item), and are able to be administered by U.S. Customs and Border Protection (CBP).

In the 111
th Congress, the United States Manufacturing Enhancement Act of 2010 (P.L. 111-227) was signed by the President on August 11, 2010. As enacted, the law temporarily suspended or reduced for three years (through December 31, 2012) duties on over 600 products, many of which renewed duty suspensions or reductions that were already in place. On December 15, 2010, H.R. 6517, a bill that, in part, proposed duty suspensions on approximately 290 additional products, passed in the House. Due to changes in the Senate version of the bill subsequently approved in the House, the duty suspensions were dropped (became P.L. 111-344).

On January 1, 2012, Chairman Camp and Ranking Member Levin of the House Ways and Means Committee, and Chairman Brady and Ranking Member McDermott of the Trade Subcommittee introduced H.R. 6727, the “U.S. Job Creation and Manufacturing Competitiveness Act of 2013.” The package was based on over 2,000 bills that were introduced in the House and Senate during the MTB process that was conducted from March 30 to April 30, 2012. Since the bill was not taken up in either the House or the Senate, MTB legislation could continue to be a legislative issue in the 113
th Congress.

On June 12, 2012, S. 3292, the Temporary Duty Suspension Process Act of 2012, a bill seeking to require the USITC to recommend temporary duty suspensions to Congress, was introduced. This bill is similar, but not identical, to S. 1162 (the Removing Hurdles for American Manufacturers Act of 2011), introduced on June 9, 2011.

This report discusses: first, the review process of duty suspension bills by House Ways and Means and Senate Finance committee staff, the U.S. International Trade Commission (USITC), and other relevant agencies; second, MTB legislation debated in the past few Congresses; and third, some details of the debate for MTB passage. Finally, MTB legislation considered in Congress from 1983 to the present is summarized in Table A-1.

Date of Report: January 10, 2013
Number of Pages: 19
Order Number: RL33867
Price: $29.95

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