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Lack of Miscellaneous Tariff Bill Hamstrings Manufacturers

By NAM News Room

As manufacturers continue to lead America’s economic recovery, they’re doing so in the face of a real—and avoidable—challenge. Because Congress has failed to act, manufacturers in the United States have been operating without a Miscellaneous Tariff Bill since January, which has led to higher prices, greater difficulty in competing with businesses overseas and harm to American workers.
 
The context: The MTB temporarily eliminates tariffs on imported materials that are either not made in the United States at all or are not available in sufficient quantities. It boosts American competitiveness and ensures that U.S.-made products are competitive with products manufactured outside of the country. 

  • Typically, the MTB is reauthorized every few years. In 2018, Congress unanimously passed the Miscellaneous Tariff Bill Act of 2018, which reauthorized the MTB through 2020. Unfortunately, the bill expired at the end of last year, and Congress has failed to act, leaving manufacturers in the United States paying extra taxes of $1.3 million per day on vital products that are not available in this country.   

What’s happening now: While the Senate passed MTB legislation in June 2021 as part of the U.S. Innovation and Competition Act , the House still needs to act. If the House doesn’t pass bipartisan MTB legislation soon, manufacturers, their workers and their communities will continue to face unnecessary additional costs—as both Dow and Element Electronics have.
 
Impact on manufacturers in the U.S.: Manufacturers like Dow are feeling the impact. As prices increase for everyone, manufacturers are also battling rising costs, which makes it difficult to manage cost-effective production and impacts the ability to sustain and expand opportunities for American workers. 

  • “For Dow, the MTB supports as many as 6,000 jobs across the United States, from Michigan and Texas to Illinois, Kentucky and beyond,” said Eric Friedman, the senior director of federal government affairs at Dow. “Dow is the largest materials sciences company in North America. It is critical for us to ensure that we have competitive access to our essential inputs for our U.S. operations and can manage costs. It speaks directly to our U.S. manufacturing competitiveness and the incredible workforce that drives innovation.” 

The harm to small business: For television producer Element Electronics, headquartered in Winnsboro, South Carolina, the lapse of the MTB has caused a significant readjustment, forcing them to downsize their business and lose workers.  

  • “As a result of the lapse in the MTB…Element has gone from operating at full capacity and over 520 team members at the end of [2020] to operating just four lines, and employment has dropped to 370 team members,” said David Baer, chief operating officer and general counsel at Element Electronics, in recent congressional testimony

What we’re saying: “The Miscellaneous Tariff Bill supports manufacturers and their workers who make things in America and who have been instrumental to America’s economic resurgence,” said Ali Aafedt, director of trade facilitation policy at the NAM. “Amidst a global pandemic, severe supply chain shortages and other hurdles, Congress’ lack of action on the MTB is yet another challenge. Congress has the opportunity to support manufacturers, workers and consumers in the United States by passing bipartisan MTB legislation by the end of the year.”

Read the full story here.

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