US International Trade Commission Hands MTB Process to Congress
The US International Trade Commission (“ITC” or “Commission”) has submitted its final report on the miscellaneous tariff bill (MTB) petitions it received to the US House of Representatives Committee on Ways and Means and the US Senate Committee on Finance for their use in developing the related legislation for congressional consideration. The MTB process would allow imports of approved products to enter the United States at a reduced or zero tariff rate, subject to certain conditions and limitations. Under the procedure created by the 2016 American Manufacturing Competitiveness Act (AMCA), the ITC receives MTB petitions from industry, coordinates an initial vetting to identify any opposition and determines the estimated tariff revenue impact if the applicable tariff were reduced or eliminated.
In its final report, the Commission categorized petitions as (a) meeting the requirements of the AMCA and recommended for inclusion, (b) not meeting qualifications for consideration or (c) not recommended for inclusion in MTB legislation. The ITC evaluated a total of 3,442 petitions. The largest product categories were for chemical products (1,839 petitions); machinery and equipment (715 petitions); and textile, apparel and footwear products (581 petitions). Out of 3,442 petitions, the Commission recommended the inclusion of 2,695 and declined to recommend 705.
With the transmission of the final report to Congress, the ITC has now completed its work on the second petition cycle mandated by the AMCA. Further progress on the MTB lies in the hands of Congress. Although the AMCA contains a sense of Congress that an MTB should be considered no later than 90 days after the final ITC report, there is no requirement in the law for an MTB to receive floor action. The House Ways and Means Committee and/or the Senate Finance Committee must draft the MTB legislation, and it must be passed by both bodies. Some modification to the product scope may be possible, but it is highly unlikely that products that were not vetted during the ITC process would be added. However, changes that would exclude products where the ITC process failed to identify domestic production or that would modify article descriptions to narrow the scope of a provision to exclude limited domestic production may be possible. In addition, the Congressional Budget Office (CBO) will perform its own scoring of the revenue loss associated with the proposed reduction or elimination of tariffs. CBO's model may result in slightly more favorable tariff rates than were possible based on the ITC's calculations.
The Commission’s final report and other background information can be found on the ITC website at https://www.usitc.gov/trade_tariffs/mtb_program_information.