Manufacturers Get Ready: Potential Tariff Relief on The Horizon

Posted: Updated:

Federal legislation will soon allow some U.S. manufacturers a major tax break. Manufacturers using materials not available here or sold domestically in insufficient quantities can be exempted from federal tariff payments. Currently, manufacturing imports require full duty payments.

In May 2016, Congress directed the International Trade Commission to establish a process for U.S. manufacturers to seek relief from duties on imported goods necessary for their production. Such tariffs currently are imposed by the Harmonized Tariff Schedule of the United States.

Since 2012, the Schedule has not been updated by Congress with miscellaneous tariff bills, or MTBs. In the absence of MTBs, manufacturers have been paying the entirety of import tariffs. The National Association of Manufacturers estimates this cost to U.S. businesses a total of $748 million. If your business has contributed to this balance, you soon will be able to petition to avoid these tariff payments on future purchases.

The ITC posted draft submission forms for comment on its website in mid-June, 2016. The ITC will provide the final steps in the process manufacturers can use to seek relief by October 15, 2016, after which manufacturers can submit their petitions for relief.

However, simply submitting the form is not a foregone conclusion of tariff relief. The submitted petition has to be analyzed by the ITC to verify that the business truly has exhausted all options and cannot obtain the goods in sufficient quantities in the United States. Therefore, businesses need to carefully prepare the forms and be ready to defend their petitions to the ITC. Having support from legislative and administrative leaders also may be helpful in efforts to include the business on the ITC’s final approved list and to add the petition to the final legislation that ultimately will grant the tariff relief.

Also, timing will be of essence once the submission process begins. The opportunity to petition for the tariff relief is expected only to be offered once every three years, so having knowledgeable manpower and sufficient resources to devote to the project in short order will be critical.

Penelope Farthing is Senior Advisor at Bose Public Affairs Group
Patricia Power is Senior Vice President, Federal Relations at Bose Public Affairs Group

  • Perspectives

    • Creating the Work Spaces that Draw Talent to Indianapolis

      The future economy will be driven by data, powered by robotics and heavily invested in the building blocks of nature – biotech and genetic engineering. That’s true of the economy nationwide, and it’s especially true here in Indianapolis, where dominant pharmaceutical and biotech companies are putting us at the cutting edge of the science-based economy. It all sounds larger than life. But the facilities that will house these industries will always be...

    More

Events



  • Most Popular Stories

    • Allison and Stanley Chen provided the lead gift for the campaign. (Provided Photo/ISI)

      International School Launches Capital Campaign

      The International School of Indiana has publicly launched a capital campaign to establish a unified campus in Indianapolis. As part of the ONE ISI campaign, the school is looking to raise $6.5 million to build a new school building for pre-elementary and elementary students at the site of its middle and high schools. The public launch follows a 10-month silent phase of the campaign, during which ISI raised $5 million from more than two dozen donors. Currently, ISI's operations are...

    • Money magazine judges Fishers as 3rd best place to live in the U.S.

      Fishers Makes Top 10 List of 'Best Places to Live'

      Three communities in Indiana made the top 100 list of best places to live in the country, but only one made the top 10. Fishers was judged by Money magazine as the third best place to live in the United States, behind Clarksville, Tennessee and Round Rock, Texas.

    • Lt. Governor Suzanne Crouch will be on hand for the announcement.

      Jobs Announcement Set for Indy

      City and state officials will Wednesday make a jobs announcement in downtown Indianapolis. Few details are available, however the Indiana Economic Development Corp. says leaders from an Indianapolis-based startup will be involved.

    • (photo courtesy of Dickinson Fleet Services)

      Dickinson Fleet Services Expands; Grows Talent Pool

      Indianapolis-based Dickinson Fleet Services is expanding its truck maintenance reach with the purchase of A1 Diesel Service of Hendersonville, Tennessee. Dickinson says this is its ninth acquisition since 2017 and the third in 2019. 

    • Photo courtesy of Bristol Parks

      Startup Plans to Add 250 Jobs By 2021

      A metal forming startup is seeking to use a facility in Bristol that has been empty since 2017 for a major manufacturing operation. The Elkhart Truth reports Brinco will invest $52 million in the project and add 250 jobs.