In a bit of good trade news, late last week, the Senate passed a slightly modified version of the Miscellaneous Tariff Bill Act of 2018 that had passed the House back in January 2018. The bill authorizes temporary duty suspensions or reductions for hundreds products (the duty suspensions/reductions are generally effective for 2 years). The bill also contains a provision extending certain customs user fees.
The Senate version strikes a small number of products included in the House version, and modifies a handful of others. As a result, the two versions of the bill will now need to be reconciled (given the small number of changes made by the Senate, the House will likely just vote on/pass the Senate version). If this occurs, then it appears that the MTB will be sent to the President for signature as a stand-alone bill (rather than waiting to include it as part of a larger trade bill). Given the concerns some in Congress have raised regarding the President’s recent trade policies – e.g., the handling of the ZTE enforcement case, the processing of Section 232 product exclusion petitions, etc., MTB’s best shot is probably as a stand-alone bill, rather than waiting to be included as part of a larger trade bill, as has been done traditionally. It will also be interesting to see whether the President is inclined to sign such a bill. While MTB is generally viewed as providing a limited benefit to U.S. manufacturers (the MTB’s intent is to provide a tariff break to manufacturing inputs that are not available domestically), the President has indicated in the past that MTB primarily benefits Chinese exporters.
It is important to note that the MTB, if enacted, only impacts the Column 1, General rates of duty for covered articles (i.e., the Most Favored Nation/Normal Trade Relations rates). The MTB does not change or otherwise impact Section 232 or Section 301 duties; those still apply.
All companies should review the list of products included in the MTB. The provisions are not (supposed to be) company-specific. Stated differently, any company that imports an article covered by a MTB description can claim the duty benefit (even if you were not the proponent of the provision). Also, it is worth mentioning that the process of requesting MTB benefits will re-open in about a year (by October 15, 2019), so it is not too early to start preparing to participate in that process.
We hope this is helpful. We helped numerous companies get their articles included in the MTB and would be happy to discuss this with you further. If you have any questions, please let us know.