ANNOUNCED AS TEMPORARYNo
On July 27, 2010 President Obama signed into law a bill (H.R.4380) entitled the United States Manufacturing Enhancement Act of 2010 (now Public Law No: 111-227). This is a miscellaneous tariff bill (MTB) that provides for the suspension of import tariffs (i.e., duty-free treatment on a most-favored-nation basis) for dozens of products. Some of the products covered by this bill already receive duty-free treatment under the terms of a previous MTB, which formed a part of the even broader Tax Relief and Health Care Act of 2006 (Public Law 109-432), but those suspensions expired on December 31, 2009. The products that were granted duty-free treatment under that earlier law thus 'snapped back' to dutiable status on January 1, 2010. The new MTB restores many of those lost suspensions, and also covers new items that would receive duty-free treatment for the first time.
The bill provides for retroactive application of the suspensions, and expires at the end of 2010.
MTBs are developed in the first instance by the two main trade committees in Congress, these being the Ways and Means Committee in the House of Representatives and the Finance Committee in the Senate. In this instance it is the Senate Finance Committee that is taking the lead in developing the MTB. A list of the many separate bills that were under consideration for inclusion in the MTB was posted. Most of the proposed suspensions affect chemicals, many of which are quite obscure to the layman, but other items that might be included are rolled glass sheets, various types of footwear, snow globes, magnets, ski poles, manganese flake, fabric bags, and even swimming pools (among many others). Not all items under consideration ultimately made it into the final bill. Both of the trade committees operate under general rules providing that any individual item in the bill cannot exceed more than $500,000 in revenue loss (i.e., foregone tariffs), and both committees will usually insist that there be no domestic production of, or opposition to, the products in question. The committees also receive input on these matters from the administration and from the U.S. International Trade Commission. The process is described at greater length on the websites of the Senate Finance Committee (click here) and the Office of the U.S. Trade Representative (click here).
MTBs became more controversial following the publication of an exposé by the Washington Post in 2006.* This minor scandal helped to inspire provisions in the Honest Leadership and Open Government Act of 2007, under which legislators are required to disclose when they add a tariff suspension to a larger bill. They must justify the tax break in writing and name the company that would benefit, and the information must be posted in a searchable form on the Internet at least two days before Congress votes on the measure. The heightened scrutiny was also a contributing factor in the failure of the 110th Congress (2007-2008) to enact a duty-suspension bill.
* :Joe Stephens, 'A Quiet Break for Corporations' The Washington Post (September 20, 2006).
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