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Congress Approves Miscellaneous Tariff Bill

The House of Representatives on 4 September approved the Senate version of the Miscellaneous Tariff Bill Act of 2017 (H.R. 4318), which would reduce or suspend import duties through 31 December 2020 on nearly 1,700 products that are not otherwise available in the United States. The bill will now go to the president’s desk for signature and enactment into law. House Speaker Paul Ryan said the legislation will eliminate "costly, needless taxes on key materials that can't be found in the U.S." Although Trump advisor Dan DiMicco has complained about the MTB process including products from mainland China - including some subject to Section 301 tariffs – both the National Association of Manufacturers and the U.S. Chamber of Commerce have been lobbying for passage for years.

H.R. 4318 includes a broad range of products of potential interest to Hong Kong and mainland Chinese exporters. A majority of the products that made it to the final House and Senate bills are chemical inputs. Also in the legislation are various plastics and plastic products, camera flotation devices, rubber pet toys, automotive gaskets, conveyor belting of vulcanised rubber, life jackets for pets, sleeping bag stuff sacks, non-woven polypropylene bags, novelty backpacks, binocular carrying cases, bags designed for janitorial carts, cases for electronic games or accessories, women’s leather jackets, leather gloves, boxing gloves, leather belts, woven wood and bamboo products, cashmere and camel hair, cashmere and camel hair yarn, woven fabric of vicuna hair, woven cotton gauze, pique fabric, 50D nylon, polyvinyl alcohol yarn, high tenacity single rayon yarn, polypropylene monofilament, elastic water-repellent woven polyester fabric, acrylic filament tow, acrylic and viscose rayon staple fibres, hand-tufted wool carpets, various garments incorporating snaps used to attach a heart rate monitor, women’s and girls’ man-made fibre knitted vests, men’s and boys’ silk knitted pullovers and cardigans, girls’ cotton knitted coveralls and jumpsuits, neoprene wading socks, various woven garments, nylon wool packs, sleeping bag shells, textile ice bags, various footwear and headwear products, patio umbrella frames, plastic plants, glass beads, cookware covers, glass-ceramic cookware, padlocks, manicure and pedicure sets, various machinery and equipment, swim goggles, projection screens, multi-metres, LED lamps, golf club heads, tennis and squash rackets, volleyballs, basketballs, fitness equipment and tripod camera mounts, among many other products.

The final version of the legislation reflects the removal by the Senate of seven products that were included in the House bill, namely two chemical products as well as certain collapsible insulated food and beverage bags, rotary cutting hand tools, electric commercial vehicles, cabs and bodies for electric vehicles, and mixed rare earth oxides known as Luminostar UY.

The MTB process provides that non-controversial products, which are identified by a narrow description within a given HTSUS tariff line, can be afforded duty-free or reduced-duty treatment. Since the total value of the duty savings is limited to a maximum of US$500,000, some products are afforded reduced-duty in lieu of duty-free treatment so as not to exceed that threshold. In addition, the product cannot be designated if any U.S. entity objects to its inclusion.

The last MTB expired in 2012 largely because of Republican concerns that these tariff exemptions were “earmarks” when sponsored by individual members of Congress. Following legislation to reform the process to shift more of the procedure to the independent U.S. International Trade Commission, different versions of MTB legislation were approved by both the House and Senate and the House ultimately agreed to pass the Senate version.

Content provided by Picture: HKTDC Research
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