Why America’s Manufacturers Need the Miscellaneous Tariff Bill

January 13, 2018 — Blog   

American manufacturers are at the heart of our nation’s economy, creating jobs and making products here at home that are sold to consumers around the world. To provide greater support to our manufacturers and their workers, the House is scheduled to vote next week on the Miscellaneous Tariff Bill Act of 2018bipartisan, bicameral legislation that will help them reduce costs so they can better compete and succeed.

Today, in order to make their products, many American manufacturers often must rely on certain imported goods not made in the United States. For example:

  • Lasko Products is the last remaining manufacturer of electric pedestal and desktop fans in the United States and imports a specific production component that allows it to compete with Chinese manufacturers.
  • Milliken & Company imports unique raw materials that are not available domestically to manufacture its chemicals for the packaging, food storage, and container markets.
  • Glen Raven imports solution-dyed acrylic fibers that are not available domestically to manufacture its Sunbrella brand, which includes performance fabrics for the furniture, shade, marine, and automotive industries.

Currently, these manufacturers and many others are required to pay tariffs on these imports, ultimately increasing manufacturing costs, holding back job creation and wage growth, and making it more difficult for American manufacturers to compete globally.

For decades, Congress passed legislation – known as a Miscellaneous Tariff Bill (MTB) – to temporarily reduce or suspend tariffs on these products. However, the last MTB expired in 2012, which has hurt America’s manufacturers, workers, and consumers. It’s time to address this problem and make our manufacturers competitive by reducing costs for their inputs.

At the same time, the temporary nature of this tariff relief, combined with a strong demand for these products in the United States, will encourage companies to develop the capability to manufacture these products domestically, rather than continue to import them from other countries in the future.

As more than 190 organizations wrote in a recent letter to Congress:

“Since 2012, businesses have paid billions of dollars of tariffs on products not even made in the United States, to the detriment of good-paying American jobs and American competitiveness.”

To address this problem, the bipartisan, bicameral Miscellaneous Tariff Bill Act of 2018 provides manufacturers with the temporary tariff relief they need to compete.

The legislation is based on recommendations from the independent International Trade Commission (ITC) and follows the new and transparent MTB process, which was signed into law in 2016 with broad bipartisan support. The ITC reviewed more than 2,500 petitions and found that nearly 1,700 products qualified for temporary tariff relief under the new process, which protects American businesses by ensuring no domestic producer of a like product objects to the provision.

According to the National Association of Manufacturers, the Miscellaneous Tariff Bill Act of 2018 will:

  • Provide more than $1.1 billion of much-needed tariff relief to American manufacturers over the next three years for certain imported products unavailable in the United States.
  • Increase American manufacturing output by more than $3.1 billion over the next three years – helping manufacturers create jobs, increase paychecks, and invest in our nation’s economy.
  • Encourage more manufacturing in the United States by leveling the playing field for American businesses to compete, while also maintaining the incentive for manufacturers to develop the capability to produce products that today cannot be found the United States.

As manufacturers from different sectors of the economy explained during two Ways and Means Committee hearings, passing the MTB will lower the cost of imports, create more jobs and increase wages for American workers, boost America’s competitiveness, and ultimately decrease prices for consumers.

In their own words, here’s why the MTB is so important for American manufacturers:

Cindy Smith, Agricultural Relations Director for Gowan USA, which manufactures agricultural products:

“Because not all of the raw materials needed are produced in the United States, we have found that the Miscellaneous Tariff Bill process is extremely helpful in reducing our overall costs and improving our global competitiveness.”

Ed McAssey, Chief Operating Officer for Lasko Products LLC, which manufactures fans, heaters, humidifiers, and range hoods:

The duty relief provided by the MTB on motor assemblies and related parts enables us to compete with suppliers in China who do not incur the costs of livable wages, health insurance, and retirement contributions that we provide to our employees.”

Michael Ratchford, Government Relations Associate for W.L. Gore & Associates, which manufactures a wide range of products, including electronics, military and consumer apparel markets, and medical devices:

MTBs create and support U.S. jobs. The reduced duties under the MTB serves as an incentive for Gore to increase our investment in developing new innovative technologies that would benefit outdoor enthusiasts and improve patient outcomes.”

Leib Oehmig, President and Chief Operating Officer for Glen Raven, Inc., which manufacturers textiles and is credited with the invention of pantyhose:

Since the expiration of the last MTB in 2012, import taxes on acrylic fibers have cost Glen Raven millions of dollars that otherwise would have been invested in new jobs, research and development, design and other innovative activities.”

Brooke DiDomenico, Production Manager for Nation Ford Chemical (NFC), which manufactures chemicals that are used in products such as food dyes and plastics:

The MTB is one step to help level the playing field. NFC, by necessity, must import some of the chemicals we need to support our production. … Since the MTB is only applicable to materials that are not manufactured domestically or available in sufficient quantities, it would not have a negative effect on domestic manufacturers.”

CLICK HERE to learn more about the bipartisan, bicameral Miscellaneous Tariff Bill Act of 2018 (MTB).

CLICK HERE to learn more about the new MTB process, which was signed into law in 2016.

SUBCOMMITTEE: Trade