With a possible third round of retaliatory tariffs set to go into effect in the next week or so, some 6000 items are subject to an additional 10% tariff upon entry into the US, with an estimated total cost of $200 billion dollars. However, there is some relief in sight for US importers: on September 5, the US Congress approved the passage of the Miscellaneous Tariff Bill (MTB).
The legislation will now go to the President’s desk to be signed, however, we do not know at this time what action the President will take. The administration has not actively opposed the bill but has aggressively pursued new tariffs or the threats of them as part of its trade policies and therefore may not be keen to remove existing ones.
Through the Miscellaneous Tariff Bill (MTB), Congress temporarily suspends or reduces tariffs on certain imports for three years.
Most of these duty suspensions relate to chemicals or other inputs used by US manufacturers, who assert that the tariff relief provided by the MTB helps reduce their manufacturing costs, thus making their products more competitive.
The outlined criteria for MTB consideration are that each duty suspension must be:
- Non-controversial (i.e. no domestic producers or member objects)
- Revenue-neutral (Forgone tariffs of no more than $500k per product in a calendar year; and
- Administrable by US Customs and Border Protection
The MTB offers only temporary, not permanent, relief from tariffs, maintaining an incentive for companies to develop the capability to manufacture these products in the United States.
The current MTB has about 55 percent of the goods given duty reductions, and it applies to manufacturing inputs, including many chemicals. Consumer goods such as sweaters, shoes, blenders, food processors, pillows, slow cookers, and unicycles are also a significant part of the list. This trade bill is an important bill that will boost US manufacturing by keeping the costs to manufacture in line with the world economy.
BDP will continue to watch the MTB on its journey through the regulatory framework, though we expect the bill to be signed soon. From there, the full release of the bill details will be available for your review. Keep an eye out for a full breakdown of what this means for your supply chain.