22 Oct 2019
MTB Saving Importers Hundreds of Millions of Dollars According to USITC Report
The U.S. International Trade Commission has released a report on the effects on the U.S. economy of the duty suspensions and reductions under the most recent miscellaneous tariff bill, which took effect on 13 October 2018 and will expire on 31 December 2020. This report also includes recommendations from interested parties on those domestic industry sectors that might benefit from permanent duty suspensions or reductions, with a particular focus on inequities created by tariff inversions.
The USITC notes that the report only examines the effects of the MTB during the first four to five months after it was enacted. Among the report’s main findings are the following.
- Between November 2018 and May 2019, the MTB saved importers US$179 million in duties on imports of US$5.4 billion.
- As a result of the MTB, nearly a quarter of manufacturers responding to an USITC survey reported a decrease in production costs, and between one-quarter and one-third of respondents expected future increases in sales volumes, customers and investment in new product development.
- For all of the HTSUS 9902 headings that provide duty suspensions and reductions under the MTB, prices declined by 3.9 percent on average.
- As of March 2019, more than 90 percent of responding firms imported or planned to import goods under the HTSUS 9902 headings and about one-third of those had increased or planned to increase imports.
- However, many respondents said they had not had enough time to take full advantage of the duty suspensions and reductions, and some reported that section 301 tariffs on products of mainland China have lessened the positive impacts of the MTB duty relief.
- Nearly two-thirds of the MTB’s provisions were recommended for permanent duty suspensions and reductions, 10 percent of which were identified as having a tariff inversion (i.e., where the tariff rate on an imported input is higher than that on the related finished product).