WASHINGTON — A coalition of more than 200 major corporations and trade associations sent a letter to lawmakers Wednesday urging them to pass legislation that would establish a new process for eliminating tariffs on imported inputs and products deemed not available domestically.
The large group behind the letter cut across several industries and included such major industry players as Wal-Mart Stores Inc., Nike Inc., Adidas, VF Corp., Procter & Gamble and Milliken & Co.
They are calling on Congress to pass the “American Manufacturing Competitiveness Act of 2016,” which the House Ways & Means Committee marked up and unanimously passed on Wednesday.
The bill is seen as a first step to reenergizing a process that U.S. companies have relied on in the past known as the Miscellaneous Tariff Bill process. Congress has periodically approved MTB bills, suspending duties on millions of dollars’ worth of certain imported components to help U.S. manufacturers better compete.
The last MTB bill passed by Congress expired in 2012 and was never renewed, leaving apparel and footwear brands and textile firms having to pay tens of thousands of dollars in tariffs on imported components that they need to make their products because they are no longer made in the U.S.
Now a bipartisan group of lawmakers is seeking to reform the way in which individual imported inputs and products are considered and included in legislation. Under the pending legislation, local businesses will petition the U.S. International Trade Commission, which then will solicit comments from the public and the administration, conduct an analysis and issue a public report to Congress with recommendations regarding products that meet the MTB criteria, including that there is no domestic production.
If that legislation on the new process is enacted, the two key committees in the House and Senate could then introduce MTB legislation containing duty suspensions for scores of imported products and components, which must also pass before companies would again see duty breaks.
“We have long supported bipartisan and bicameral efforts to pass MTBs to correct on a temporary basis distortions in the U.S. tariff code that place an unnecessary and anti-competitive tax on manufacturers, retailers and other businesses across the country that rely on imported products not available domestically,” the coalition said in the letter.
The National Association of Manufacturers estimates that U.S. businesses have collectively faced an annual $748 million tax increase on the imported products since the bill expired in 2012, while the economy has suffered a $1.87 billion economic loss.
“As a result, manufacturers, especially small- and medium-sized manufacturers, in industries ranging from agriculture and electronics to textiles, chemicals and beyond, have seen their costs go up for inputs not produced in the United States, undermining American competitiveness and the ability of these companies to retain and create manufacturing jobs in the United States,” the coalition said in the letter. “Action on a new MTB process is long overdue. To boost the competitiveness of our industries and correct longstanding distortions in the U.S. tariff code, we strongly urge Congress to work expeditiously and jointly to pass a new MTB process that will eliminate distortions in the U.S. tariff code that undermine the competitiveness and job growth of our industries.”
Stephen Lamar, executive vice president at the American Apparel & Footwear Association, said: “Companies that were benefiting by using this [process] have been paying duties for the last couple of years. When you pay those tariffs, it increases costs and hurts your ability as a company to apply those savings to either job creation or innovation and research and development.”
Lamar said it could take several more months for legislation to move through Congress and he doesn’t expect MTB legislation with the duty suspensions to be enacted until sometime next year.
“We have members who have specific inputs that they are unable to source in the U.S.,” said Augustine Tantillo, president at the National Council of Textile Organizations. “Many of those products have gone offshore for various regulatory reasons, such as acrylic fibers and rayon.”
Tantillo said if Congress does eventually pass new MTB legislation, his members will benefit greatly from the tariff breaks.