On April 13, the House Ways and Means Committee introduced the American Manufacturing Competitiveness Act of 2016 (the "Act"), which was eventually signed by President Obama on May 20, 2016. This bipartisan bill is aimed at helping American manufacturers compete in the global economy.
The American Manufacturing Competitiveness Act of 2016
The Act notes several Congressional findings, including:
The Harmonized Tariff Schedule (HTS) of the Unites States imposes duties on imported goods for which there is no, or there is insufficient, domestic availability;
The imposition of duties on such goods creates artificial distortions in the economy that negatively affects U.S. manufacturers and consumers; and
The manufacturing competiveness of the U.S. around the world will be improved if Congress regularly updates the HTS to suspend or reduce duties on such goods.
The Miscellaneous Tariff Bill
This bill creates a three-step process for which manufacturing tax cuts are proposed through the Miscellaneous Tariff Bill (MTB). The first step of the process would begin with petitions made by U.S. companies to the independent International Trade Commission (Commission) by those who can demonstrate that they will benefit from tariff reductions. After these petitions are filed, an independent panel would receive comments from the public to analyze the tax cuts before making its recommendations to Congress.
In the second step, the Commission will issue a report to Congress with its analysis and recommendations, including:
determining whether or not domestic production of the item subject to the petition exists;
determining whether or not a domestic producer of the article objects to the tariff suspension or reduction;
estimating of the amount of revenue loss due to the tariff suspensions or reductions;
identifying the beneficiaries of the tariff suspensions or reductions; and
listing products that meet the MTB standards.
Finally, the House Ways and Means Committee would review the Commission's analysis and recommendations and draft an MTB proposal to Congress.
After this process is complete, the MTB would be sent to Congress for its passage.
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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.
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