Senate Passes Bill to Eliminate Unnecessary Border Taxes

Fashion designers, rejoice. The Senate has passed a bill this week that will benefit textile producers and apparel brands by aiming to eliminate tariffs on imported goods that are not commercially available in the U.S. Hailed by fashion brands, as well as the Retail Industry Leaders Association and the National Association of Manufacturers, since its introduction to Congress earlier this year, the tariff bill, known as the American Manufacturing Competitiveness Act of 2016, will eliminate or reduce hundreds of import duties on raw materials and intermediate products that are not produced or available domestically. Specifically, it “establishes a process for the submission and consideration of petitions for temporary duty suspensions and reductions.”

According to WWD, “Under the legislation, local businesses will petition the U.S. International Trade Commission, which then will solicit comments from the public and the administration, conduct an analysis and issue a public report to Congress with recommendations regarding products that meet the MTB criteria, including that there is no domestic production.”

The last miscellaneous tariff bill (“MTB”) passed by Congress expired on December 31, 2012, and since Congress has not acted on MTB legislation for over three years, manufacturers have been paying substantially higher taxes on manufacturing inputs since January 1, 2013. The National Association of Manufacturers estimates that manufacturers have paid upwards of $748 million more in taxes annually as a result, and that the United States economy has lost $1.857 billion. Retailers and retail organizations, alike, have been lobbying Congress to pass legislation to eliminate what they deem to be “unnecessary” border taxes in order to enhance the competitiveness of American businesses.

On the heels of the Senate’s passage of the bill on Tuesday evening, Rick Helfenbein, president and chief executive officer of the American Apparel & Footwear Association, the industry trade group representing hundreds of clothing, footwear, and sewn products companies and their suppliers, released a statement, saying:

We congratulate Congress for moving so quickly to pass the MTB reform bill. This bill creates a transparent and easy to understand process that will enable U.S. apparel, footwear, and textile companies to reduce tariff costs on inputs and other articles no longer available in the United States. The resulting savings will create American jobs, spur innovation, and benefit U.S. families. We urge President Barack Obama to quickly sign this important legislation into law, and for the U.S. International Trade Commission to launch this new MTB process as soon as possible.