Apr 10, 2015 - 9:00am

Trade’s Unfinished Business: The Miscellaneous Tariff Bill

Senior Vice President for International Policy

As Washington debates a bill to renew Trade Promotion Authority (TPA), several other trade issues also are calling out for attention. For example, why does the United States slap tariffs on imported goods that U.S. manufacturers and consumers need but that aren’t even available from domestic sources?

The short answer: We shouldn’t. That’s why the U.S. Chamber of Commerce strongly supports the Miscellaneous Tariff Bill (MTB).

Over the past three decades, a succession of MTBs has provided temporary relief from select tariffs that only “protect” nonexistent domestic producers. These are taxes applied to imported materials and intermediate products that are essential to U.S. manufacturers but unavailable domestically.

In this fashion, the MTB helps U.S. companies maintain their competitive edge. The last MTB supported an estimated 90,000 American jobs; this one promises benefits that could reach twice as many workers.

However, since the last MTB lapsed on December 31, 2012, the MTB has become controversial in the view of some conservatives. In this view, these duty suspensions represent an earmark because they provide a “limited tariff benefit,” which is defined under House rules as benefiting ten or fewer entities.

However, the MTB’s benefits are in no way limited: They are available to all importers of the product. Look at it the other way around: Why on earth would anyone slap a tax on just ten companies — or just one?

Fundamentally, the MTB is a tax break, not an earmark. It makes no appropriation of public funds; it merely suspends a tariff that serves only to undermine U.S. competitiveness.

Moreover, the process for approving products for duty suspension under the MTB is fully transparent. Requests are subject to review by the Department of Commerce, the Office of the U.S. Trade Representative, U.S. Customs and Border Protection, and the U.S. International Trade Commission. Opportunities for public comment are provided by both the executive branch and Congress.

The good news is that support for the MTB remains broad. Organizations such as Americans for Tax Reform agree that MTBs don’t amount to an earmark or a limited tariff benefit.

Given its importance to U.S. competitiveness, American jobs and simple fair play, the MTB should receive the same strong support in Congress it has in the past.


About the Author

About the Author

Senior Vice President for International Policy

Murphy directs the U.S. Chamber’s advocacy relating to international trade and investment policy.