Failure to Pass the MTB Will Result in a Tax Increase on Manufacturers

By May 31, 2012Trade

Recent news stories illustrate some confusion surrounding the Miscellaneous Tariff Bill (MTB) and whether the duty suspension bills contained therein are earmarks or not.  The National Association of Manufacturers believes that the MTBs are not limited tariff benefits or earmarks and in fact they are actually a tax cut to keep manufacturers competitive with our global competition. 

Once these bills are enacted, the reduced duties can be enjoyed by any manufacturer or importer who wishes to take advantage of them.  The duty suspensions are in fact widely available and not limited at all.   They result in lower costs for manufacturers in the U.S. and do not direct spending in a specific Congressional district, making them extremely different than an earmark.

The facts are that these bills only apply to import duties on products not produced domestically – so the tariffs don’t serve to protect any domestic manufacturers.  In fact, they hurt the manufacturers who rely on these inputs in order to produce their goods.  Unlike earmarks, the MTB is about removing burdensome import duties on products not available domestically that are essential to the manufacturing process in the U.S.   It’s about enhancing the competitiveness of manufacturers by keeping their costs low.   

It’s simple:  if Congress fails to act on an MTB package this year, then taxes will go up on manufacturers in the U.S. who rely on duty suspensions to keep their costs low. 

With our economy still struggling to get back on track, and we need the tools from Washington to help level the playing field. Congress should work towards passage of the MTB by year’s end to give businesses the certainty and the low costs they need to stay competitive in the global market. 

Jessica Lemos is director of international trade policy, National Association of Manufacturers.

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