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International Trade Commission Set to Move on Miscellaneous Tariff Bill

Date: 5/23/16

President signs bill on new MTB process; ITC to initiate petitions requesting duty relief

Washington, D.C., May 23, 2016 – President Obama signed legislation today to change the Miscellaneous Tariff Bill (MTB) process and avoid potential issues with the Congressional ban on earmarks. Under this new process, the International Trade Commission (ITC) will accept petitions for tariff relief, review them and make recommendations to Congress. The ITC is expected to announce key deadlines and other details for duty relief petitions via the MTB process in the coming weeks.

This legislation ends a more than three year standoff on MTB duty relief. The previous MTB expired at the end of 2012. As a result of disclosure requirements on targeted cuts in taxes and tariffs, Congress put requests for tariff breaks on hold.

Congress also approved a new process to avoid the ‘earmark’ concern and initiate the MTB process at the ITC. Under the new process the ITC would recommend reductions, suspensions or no action on tariffs for imported items either in short supply or not available in the United States. Items that are not mined, grown, manufactured or readily available in this country would be eligible for MTB duty relief provided they meet certain conditions. 

The ITC is tasked with vetting petitions and determining estimated costs of a duty reduction and the likely beneficiaries. The Commerce Department and other agencies would determine whether the U.S. produces the items under petition. U.S. Customs and Border Protection would determine whether or not it may effectively administer the tariff relief and confirm that certain products qualify for tariff relief at the time of importation.

Companies seeking duty relief would petition the International Trade Commission and make the case for lower duties on the products they import. The ITC would publish notice in the Federal Register requesting petitions and detail the contents of the petition no later than October 15, 2016.  The ITC would also seek public comment on the petitions it has received.  After receiving comments, the ITC would send preliminary and final recommendations to the Senate Finance and House Ways and Means Committees to act on. The committees would be able to remove tariff reductions or suspensions recommended by the ITC, but could not add tariffs that have not gone through the agency vetting process or are not recommended by the ITC.

“If everything goes according to plan, Congress will pass the next Miscellaneous Tariff Bill before the end of 2017, almost five years after the last MTB expired,” stated Ways & Means Ranking Member Sander Levin.

“The Sports Fitness Industry Association (SFIA) is pleased that congress has worked with this administration to resolve the ‘earmark’ issue, said SFIA President and CEO Tom Cove. “We look forward to pursuing potentially tens of millions of dollars in duty relief for our member products.” 

Current tariff rates and proposed reductions on products that previously received MTB Relief include:

 Previous  Current  2013   Current 
 MTB Products Duty Rate  Proposed Rate  New MTB Products  Duty Rate 
 Basketballs(Leather)  4.8%  Free (0%) 'Other' Balls  4.8% 
 Basketballs (Rubber) 4.8% 2.2%  Tennis Racquets (Strung) 5.3%
 Basketballs (Other) 4.8% 2.9% Tennis Racquets (Unstrung)  4.9 
 Volleyballs 4.8%  Free (0%) Badmiton Racquets  5.6% 
 Golf Bags 7.0%  1.5%  Racquetball Racquets 4.0% 
 Drivers 4.9%  4.6% Squash Racquets 4.0% 
 Fairway Woods 4.9%  Free (0%)  Table Tennis 5.1% 
 Hybrids 4.9%  Free (0%)  Exercise Cycles 4.6% 
 Irons 4.9% 3%  Exercise Rowing Machines 4.6%
 Wedges 4.9%  3%  Swimming/Wading Pools  5.3% 
 Putters 4.9% 3%    

Duty relief is limited to $500,000 per year per petition, but products can be broken into smaller subsets to maximize the duty relief. 

SFIA will organize petitions for products important to its members and provide answers to questions about drafting petitions. Interested manufacturers are encouraged to contact Bill Sells, SFIA Vice President for Government Relations & Public Affairs at bsells@sfia.org to learn more about the upcoming petition process.

ABOUT SFIA:  The Sports & Fitness Industry Association (SFIA), the #1 source for sport and fitness research, is the leading global trade association of manufacturers, retailers, and marketers in the sports products and fitness industry. SFIA seeks to promote sports and fitness participation as well as industry vitality through research, thought leadership, public affairs, industry affairs, and member services. For more information, please visit www.sfia.org.

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