LegiStorm

Summary:

U.S. importers often request that Members of Congress introduce bills seeking to temporarily suspend or reduce tariffs on certain imports. The rationale for these requests is that they cut costs for U.S manufacturers, thus enabling them to hire more workers, invest in research and development, and reduce costs for consumers. 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 tariff (or trade) bills (MTBs). When Members introduce bills, they must also file disclosure forms indicating that they have no economic interest in the entity requesting the suspension. Before inclusion in an MTB, the individual bills are reviewed by the trade subcommittee staff in each of the relevant committees, the U.S. International Trade Commission (ITC), 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 product), and are able to be administered by U.S. Customs and Border Protection (CBP). All bills, bill reports, and disclosure forms are also placed on committee websites for public comment. Duty suspensions in MTBs are only available for a limited time (generally, three years from the date of enactment), and if no subsequent MTB legislation is passed, the duty-free or reduced duty status of the products expires. Expired duty suspensions must be re-introduced to be included in new MTB legislation, and in most cases, the favorable duty status is not retroactively renewed. The last enacted MTB expired on December 31, 2012. This MTB, the United States Manufacturing Enhancement Act of 2010 (P.L. 111-227) suspended entirely or reduced duties on over 600 products. Since legislative attempts to pass an additional MTB extending the duty suspension on these products were not successful, currently, duties must be paid on these products, most of which are inputs in various U.S. manufactured products. Additional MTB legislation was introduced in the 112th Congress (H.R. 6727) and 113th Congress (H.R. 2708), but neither bill was taken up in either the House or the Senate, possibly due to controversy over whether MTB legislation violated House and Senate rules on congressionally-directed spending. The Trade Facilitation and Enforcement Act of 2015, P.L. 114-125, enacted on February 24, 2016, included a sense of Congress that urged the House Ways and Means and Senate Finance Committees to “advance, as soon as possible, after consultation with the public and Members of the Senate and House of Representatives, a regular and predictable legislative process for the temporary suspension and reduction of duties that is consistent with the Senate and of the House.” Some in Congress propose changing the MTB process by requiring an agency outside Congress, such as the ITC, to receive petitions and H.R. 4923 to vet products for duty suspensions. Bills supporting this approach have been introduced in 114th Congress (S. 2794, H.R. 4923). Thus, Congress may discuss a procedure to change the MTB process in the second session of the 114th Congress. This report provides recent developments regarding the proposed MTB process, and compares this proposal for vetting MTBs with the existing review process. It also tracks the current proposal and provides information on MTB legislation introduced from the 109th to the 113th Congresses. Legislation and House and Senate rules covering “earmarks” and “limited tariff benefits” that may affect the current MTB debate are also discussed. The report also presents issues for Congress.