The miscellaneous tariff bill (MTB) process, which lets companies request temporary reductions of general tariffs on imported products, will accept applications for a second round of MTB requests in October 2019. This Legal Update provides a general overview of the MTB timeline and application process.
MTB 2019 will follow the same process as the round initiated with a call for petitions in 2016. Petitions approved during this process were granted with the passage of the Miscellaneous Tariff Bill Act of 2018 ("MTB Act of 2018"). Under the American Manufacturing Competitiveness Act of 2016 (AMCA), an individual product may be granted a period of duty-free or reduced-duty access if that product does not directly compete with a product made in the United States and the lost tariff revenue is less than US$500,000 per year. The MTB process begins when a company files a petition with the US International Trade Commission (ITC). After going through vetting by the ITC and a public comment period, approved petitions will be sent to Congress for potential inclusion in a bill that provides for temporary suspension or reduction of duties of the product. (For further legislative background on the MTB, see our April 18, 2016 Legal Update.)
It should be noted that the MTB does not suspend or reduce additional tariffs imposed by, for instance, Section 301 measures on Chinese goods.
Anyone who received a temporary duty reduction or suspension under the MTB Act of 2018 will need to reapply during the upcoming process to extend the measure beyond December 31, 2021, when the current batch of tariff reductions/suspensions expires.
Although MTB 2019 is designed to be a 10-month process, it could take longer. The approximate time frame for each step of the process is detailed below:
While the ITC has yet to fully update its guidance for the MTB 2019 process, we expect that the procedures will be largely similar to the 2016 exercise.Requirements
Information required in a petition includes (but is not limited to):
- A description of the product, including the permanent HTS classification. Petitioners will be asked to attach CBP documentation (e.g., liquidated entry summary, CF 29) evidencing CBP’s classification of the product.
- An election of either a temporary duty suspension or a temporary duty reduction. For the latter, the petition should indicate the duty rate requested.
- A brief description of the US industry that uses the product.
- Countries the product is being imported from.
- Import estimates of the product for each year from 2018 to 2024.
- Information on the competitive domestic product (if any).
Petitioners seeking to renew an approved MTB provision from 2016 will have an option to do so. All petitions and comments must be submitted through the ITC’s online MTB Petition System (MTBPS), whose link, along with other MTB information, is provided on the ITC’s dedicated website for MTB.
To be successful, a petition must meet several substantive requirements. A few are noted here:
- Article descriptions must be drafted properly. You may wish to seek advice from experienced counsel.
- Estimated revenue loss must be less than US$500,000 per year.
- There must be no objection. The petition will fail if a domestic producer or a Member of Congress objects.
- The petitioner must be a “likely beneficiary” of the duty reduction.
Petitioners should note that, if approved, the duty suspension or reduction will be made available to any importer of the product.
The MTB process provides a potential temporary reprieve for general tariffs on imported products. Companies wishing to take advantage of the process are advised to start preparing their petitions as soon as possible and to seek the assistance of trade counsel when necessary.