The Cost of Inaction on the Miscellaneous Tariff Bill
It’s been more than two years since the Miscellaneous Tariff Bill expired—and the lack of renewal is harming manufacturers in the U.S.
What’s going on: Manufacturers have been operating without an MTB—legislation that temporarily eliminates or reduces tariffs on products not available in the U.S.—since January 2021, when MTB legislation that had been passed in 2018 expired.
- The MTB is typically renewed every few years. In June 2021, the Senate passed an MTB measure as part of the U.S. Innovation and Competition Act, and the House passed a different version in the America COMPETES Act, but Congress did not agree to trade provisions in the final China competition legislation.
- No MTB legislation has been introduced during this Congress in either chamber.
Why it’s important: The result of this inaction has been a direct economic hit to manufacturers, particularly small and medium-sized manufacturers that are paying more for product inputs.
- Since the MTB expired in December 2020, manufacturers and other businesses have paid more than $1 billion—or $1.3 million per day—in anticompetitive tariffs for goods they cannot source in the U.S., according to an NAM analysis.
- The added costs can create higher prices for consumers, making it harder for American families to buy goods from manufacturers in the U.S.
- Due in part to these tariffs, some manufacturers are having difficulty maintaining current staffing levels and expanding opportunities for existing workers.
Hurting the heartland—and Ukraine: Sukup Manufacturing Co., headquartered in Sheffield, Iowa, is a family-owned and -operated manufacturer of grain-storage and grain-handling products. It is paying tens of thousands of dollars in tariffs to import components from the Kyiv province of Ukraine.
- In 2022, the company paid nearly $40,000 in tariffs on imports from Ukraine.
- Ukraine’s export market is essential to its economic development as well as its ability to withstand Russia’s invasion. The lack of an MTB is creating barriers between companies in the U.S. and their Ukrainian partners at exactly the wrong time.
Hurting a local economy: For Element Electronics, the last remaining U.S. producer of LCD TVs, the absence of an MTB has created a highly uneven playing field—which has led to layoffs of employees at the Winnsboro, South Carolina, facility.
- Mexican producers of LCD TVs buy the same LCD panels as Element but are allowed to import them duty-free. They are then able to export the finished TVs to the U.S. duty-free, too, putting Element at an unfair disadvantage.
- Restoring the MTB would allow the company to compete fairly and return to full production and employment.
Creating jobs overseas instead of in the U.S.: Glen Raven, a 143-year-old global fabric manufacturer based in Burlington, North Carolina, uses the MTB for duty-free access to raw materials that haven’t been made in the U.S. in decades. When the previous MTB expired, the company was compelled to invest in operations outside of the U.S.
- During the pandemic, the business created more than 200 jobs, but because of the tariffs, it could not afford to locate the positions in the U.S. and instead expanded operations in Europe and elsewhere.
- “While we are committed to job creation and investment in the U.S., if we are unable to be competitive in this environment, we have a responsibility to invest where we have the greatest opportunity to achieve our growth objectives,” said Glen Raven President and CEO Leib Oehmig.
Losing customers: The family-owned Nation Ford Chemical, another South Carolina manufacturer, makes products used every day by the U.S. military. The absence of an MTB has cost the small company customers and is jeopardizing some of its 80 jobs.
- In 2022, to make just one of its products—a jet-engine lubricant additive called PANA—the Fort Mill–based company spent almost $500,000 on duties alone.
- Tariffs have cost NFC so dearly that it may soon be forced to close the smoke-dye component of its business. If it does, the company would have to lay off up to 10 workers, and the U.S. military would have to source the product from foreign markets.
Costing taxpayers: ICF Mercantile, a manufacturer based in New Jersey, purchases raw materials that are not available in the U.S. for products it sells to NASA and the Defense Department.
- The company is forced to pass the cost of the 10% tariff on to its government customers, which ultimately increases costs for American taxpayers.
What we’re doing: The NAM continues to lead the business community in urging Congress to pass the MTB.
- “If Congress is serious about supporting manufacturers and workers in the United States, they must prioritize the passage of the MTB as soon as possible this year,” said NAM Director of Trade Facilitation Policy Ali Aafedt.