Tariff Modifications: Miscellaneous Duty Suspension Bills
Prepared for Members and Committees of Congress
Constituent importers often request that Members of Congress introduce bills seeking to suspend
or reduce tariffs on certain imports on their behalf. The vast majority of these commodities are
chemicals, raw materials, or other components used as inputs in the manufacturing process. The
rationale for these requests, in general, is that they help domestic producers of the downstream
goods reduce costs, thus making their products more competitive. In turn, these cost reductions
can be passed on to the consumer.
In recent congressional practice, House Ways and Means and Senate Finance Committees, the
committees of jurisdiction over tariffs, have combined these duty suspension bills and other
technical trade provisions into larger pieces of legislation known as miscellaneous tariff bills
(MTBs). Before inclusion in an MTB, the individual legislative proposals introduced by Members
are reviewed by trade subcommittee staff and several executive branch agencies to ensure that
they are noncontroversial (generally, that no domestic producer objects) and relatively revenue-
neutral (revenue loss of no more than $500,000 per item).
Late in the 109th Congress, the House passed H.R. 6406, a trade package that included suspension
of duties on about 380 products until December 31, 2009 and inserted it into H.R. 6111, a
previously House-passed tax extension package. The Senate approved H.R. 6111, and it was
signed by the President on December 20, 2006 (P.L. 109-432). Tariff suspensions on about 300
other products had been previously inserted into H.R. 4, The Pension Protection Act of 2006 (P.L.
In the first session of the110th Congress, congressional ethics and earmark reform legislation also
targeted “limited tariff benefit[s],” defined as “a provision modifying the Harmonized Tariff
Schedule of the United States in a manner that benefits 10 or fewer entities.” This legislation
amended House and Senate rules to make it out of order to consider bills containing earmarks,
limited tax benefits, or limited tariff benefits unless certain disclosure and reporting requirements
are met by the Member proposing the legislation and the committees of jurisdiction.
On November 1, 2007, the House Ways and Means Trade Subcommittee signaled that a th
miscellaneous trade bill will be considered in the second session of the 110 Congress by issuing
an advisory calling for House Members to submit legislative proposals for inclusion in the next
MTB by December 14, 2007. The House advisory gave no specific time line for the bill’s
introduction. The Senate Finance Committee has not issued a call for MTB legislation as yet.
This report will be updated as events warrant.
Backgr ound ..................................................................................................................................... 1
“Limited Tariff Benefits” in 110 Congress Ethics Legislation................................................2
Committee, Agency, and Executive Review...................................................................................3
Agency and Executive Review.................................................................................................4
International Trade Commission’s Role..............................................................................4
Reasons for Passage............................................................................................................6
Table 1. Miscellaneous Trade Legislation, 97th Congress to the Present.........................................7
Author Contact Information............................................................................................................8
The Constitution gives Congress the primary authority over trade policy; therefore, Congress
must approve any modifications to the Harmonized Tariff Schedule (HTS). Constituents, often
representing domestic industry associations or manufacturers, will sometimes ask Members to
introduce legislation proposing to reduce, repeal, or temporarily suspend duties on certain
imports. Since the early 1980s, the House Ways and Means and Senate Finance committees, the
primary committees of jurisdiction on trade matters, have tended to incorporate duty suspensions
into larger pieces of legislation known as miscellaneous trade and technical corrections bills
(MTBs). These larger trade packages include modifications to the HTS (such as suspensions of
duties on various products), specific instructions to U.S. Customs and Border Protection (CBP)
regarding certain entries of commodities (largely where the CBP may have made an error in
classification or dealing with other technical issues in entries of goods), and minor technical
corrections to trade laws.
This report focuses briefly on recent legislative actions on duty suspensions, the current
procedure by which congressional committees evaluate and select commodities for inclusion
MTB legislation, and some of the reasons that Congress has approved them.
The introduction of MTB legislation in its current omnibus format appears to have originated in th
the 97 Congress with H.R. 4566 (Gibbons, P.L. 97-446, enacted January 12, 1983), which
proposed to “reduce certain duties, to suspend temporarily certain duties, to extend certain
existing suspensions of duties, and for other purposes.” Prior to that date, even though committee
hearings were often held on several duty suspension bills at a time, Congress tended to act on
In the 110th Congress, the House Ways and Means Trade Subcommittee signaled that it plans to
introduce a miscellaneous trade bill in the second session by issuing an advisory calling for
House Members to submit legislative proposals for inclusion in the next MTB by December 14,
2007. The advisory gave no specific time line for the bill’s introduction or consideration. The
Senate Finance Committee has not issued a call for MTB proposals as yet.
On July 28, 2006, legislation suspending or reducing duties until December 31, 2009 on about
300 products, along with a number of other trade provisions, was inserted into pension legislation
before the House. H.R. 4 (Boehner), the “Pension Protection Act of 2006,” passed the House on
the same date by a vote of 279-131. The bill was subsequently received in the Senate, and passed
on August 3 by a vote of 93-5. On August 17, the President signed the bill (which became P.L.
109-280). According to Ways and Means committee staff, the law included duty suspensions for
which corresponding stand-alone legislation had been introduced House and Senate.
On December 7, 2006, the House and Senate reached an agreement on trade legislation to be
included in a larger legislative package of tax break extensions. As part of the House-Senate
compromise, H.R. 6406 (Thomas, introduced December 7, 2006) proposed to suspend or reduce
tariffs (also until December 31, 2009) on about 380 additional products. H.R. 6406 passed the
House on December 8, 2006, by a vote of 212-184. Pursuant to the rule providing for House
consideration of H.R. 6406 (H.Res. 1100), following passage, the bill was appended to a
previously House-passed tax extension package (H.R. 6111, Tauscher). The Senate subsequently
passed H.R. 6111, including the duty suspension legislation as well as other trade and tax
provisions, on December 9, 2006, by a vote of 79-9. The President signed H.R. 6111 on
December 20, 2006 (P.L. 109-432).
On January 5, 2007, the House adopted earmark reform parliamentary procedures, also affecting
“limited tariff benefits,” in section 404 of H.Res. 6 (Adopting the Rules of the House of
Representatives). The resolution defined a limited tariff benefit as “a provision modifying the
Harmonized Tariff Schedule of the United States in a manner that benefits 10 or fewer entities.” A
simple resolution such as H.Res. 6 is only effective in the chamber that adopts it, and, once
adopted, requires no further action. The House earmark procedures—including procedures for 1
limited tariff benefits—are, therefore, now in effect.
The rule provides that, in order to be considered on the House floor, a bill or joint resolution
reported by a committee must include in the report a list of congressional earmarks, limited tax
benefits, and limited tariff benefits in the bill or the report, along with the name of the Member,
Delegate, or Resident Commissioner requesting them, or a statement certifying that the proposal
does not contain them. Similarly, if a bill or joint resolution is not reported by the committee,
prior to floor consideration, the chairman of each committee of initial referral must cause a
similar list of benefits and requesting Members to be printed in the Congressional Record. In the
case of conference reports, a list of benefits included in the conference report or accompanying
joint explanatory statement and the requesting Members must be included in the joint explanatory 2
statement in order to consider the conference report.
The resolution also provides that any Member, Delegate, or Resident Commissioner requesting a
limited tariff benefit must provide a written disclosure to the chairman and ranking minority
member of the committee of jurisdiction including (1) the name of the sponsor, (2) identification
of the individual or entities “reasonably anticipated to benefit” from the measure, (3) the purpose
of the limited tariff benefit, and (4) a certification that the sponsoring Member or spouse has no
financial interest in the benefit. The committees of jurisdiction are directed to maintain the
disclosures and make the statements regarding limited tariff benefits included in a committee-
reported bill or conference report “open for public inspection.”
1 H.Res. 6, sec. 404.
2 The House may waive this rule by unanimous consent (that is, if no Member objects) or by a motion to suspend the
rules and pass the measure, which requires a two-thirds vote to adopt. The rule also provides a mechanism for the
House to decide on a case-by-case basis whether to adopt a special rule waiving this new rule, which requires a
On January 18, 2007, the Senate passed S. 1. Title I, the Legislative Transparency and
Accountability Act of 2007, included disclosure requirements for congressionally directed
spending similar to those passed in the House. An amended version of S. 1. was considered in the
House and passed on July 31, 2007. The Senate then passed an identical version on August 2,
Sec. 521 of the law amended the standing rules of the Senate to provide that it will not be in order
to consider a bill, joint resolution reported by any committee, a bill or joint resolution not
reported by a committee, or the adoption of a conference committee report unless the chairman of
the committee of jurisdiction, the Majority Leader, or his or her designee, certifies that any
congressionally directed spending items (earmarks), limited tariff benefits, or limited tax benefits
(1) have been identified (“through lists, charts, or other similar means including the name of each
Senator who submitted the request ...”); and are (2) searchable “on a publicly accessible
congressional website” at least 48 hours (or “as soon as practicable” in the case of spending items 3
proposed in floor amendments) prior to the vote. If the disclosure is not completed, the measure 4
is subject to a point of order. The law defines a “limited tariff benefit” as “a provision modifying
the Harmonized Tariff Schedule of the United States in a manner that benefits 10 or fewer
entities,” (identical to the definition in H.Res. 6).
Additionally, any Senator who requests a limited tariff benefit (or any other directed spending
item mentioned in the law) must disclose in writing the name of the sponsor, the name and
location of the intended recipient, any individual or entities reasonably anticipated to benefit, and
the purpose of the benefit. Senators must also certify that the principal purpose of any directed
spending is not to further only the pecuniary interest of the Member or only the interest of the
Member’s immediate family, or only the pecuniary interest of a limited class of persons or
enterprises when the Member, his or her family, or enterprises controlled by them are members of 5
the affected class.
Current practice generally involves reporting out one MTB per Congress. In most congresses, the
House Ways and Means and Senate Finance committee (the committees of jurisdiction) chairs
have sent out Dear Colleague letters to all Members inviting them to introduce stand-alone
legislation on proposed duty suspensions several months before an MTB is expected to be
reported out of committee. The MTB, when introduced, includes all committee-approved
measures, including temporary duty suspensions. The stated legislative goal of the committees is
3 For a more comprehensive treatment of limited tariff benefits in the context of lobbying reform, see CRS Report
RL34008, Lobbying Reform Legislation: Side-by-Side Analysis of Lobbying Provisions in S. 1 and H.R. 2316, 110th
Congress, by Jack Maskell.
4 Any Senator may waive the application of the rule or all points of order under the rule pending an affirmative vote of
three-fifths of the Senate.
5 P.L. 110-81, sec. 521, Amendment to Rule XLIV, paragraph 9, and CRS Report RL34008, Lobbying Reform
Legislation: Side-by-Side Analysis of Lobbying Provisions in S. 1 and H.R. 2316, 110th Congress, by Jack Maskell.
for an MTB to be non-controversial so that the measure will pass both Houses by unanimous 6
consent or under suspension of the rules.
In recent Congresses, due to the number of provisions introduced (for example, about 470 new th
duty suspensions were introduced in the House in the 109 Congress), the committees of
jurisdiction have tended to request comments from interested parties at the subcommittee level,
rather than holding hearings on these bills. In practice, the subcommittee considers duty
suspensions for inclusion in the MTB only if the corresponding goods or materials are deemed
“noncontroversial” or “noncompetitive,” meaning that (1) there is no domestic producer objecting
to the duty suspension, and (2) the suspension or reduction of the tariff is seen to be in the interest
of U.S. “downstream” manufacturers (and theoretically, consumers).
Furthermore, the volume of imports and corresponding revenue loss must be “revenue neutral” or
generally not more than $500,000 per commodity. For example, the Congressional Budget Office
estimated that all duty suspensions and extensions to suspensions in House-passed H.R. 4944 th
(109 Congress) would cost the government only about $275 million in lost revenue over five 7
After duty suspension bills are introduced and referred, they are reviewed by trade subcommittee
staff, who, in turn, solicit comments from the Administration (including the United States Trade
Representative, CBP, and the Department of Commerce), and the International Trade Commission
(ITC). Committee staff often solicit public comments directly, but may do so through
administration channels or the ITC. Duty suspensions that do not meet the above criteria are
generally filtered out in this process.
Generally, the ITC is the first agency that provides a response to the committees, and is the only 8
agency directly required to do so by statute. The ITC usually contacts companies and industry
groups through its Office of Industries (either through direct contact or by sending out a
questionnaire) to solicit responses from interested parties, especially looking for U.S. producers
of similar goods as those targeted for duty suspensions.
The ITC issues “congressional bill reports” on the stand-alone bills which they forward to the 9
committees and share with relevant agencies in the Executive Branch. These reports provide
information on the dollar amount and volume of trade; estimated revenue loss if the tariff is
suspended; and technical information, including proper nomenclature, HTS heading, and
Chemical Abstracts number, if applicable. The reports also list the proponent company’s name,
6 See U.S. House, Committee on Ways and Means Trade Subcommittee Advisory, “Levin and Herger Request
Introduction of Miscellaneous Tariff and Duty Suspension Bills by December 14, 2007”, November 1, 2007.
7 Congressional Budget Office. Cost Estimate. H.R. 4944, Miscellaneous Trade and Technical Corrections Act of 2006,
May 11, 2006. Many, if not all, of the duty suspensions included in H.R. 4944 were the measures ultimately passed in
P.L. 109-280 and P.L. 109-432 as discussed above.
8 19 U.S.C. 1332 (d) and (g).
9 The ITC also publishes congressional bill reports on the Internet. See http://www.usitc.gov/tata/hts/other/rel_doc/
other domestic firms contacted by the ITC, and each firm’s position on the proposal. If a company
writes a letter either supporting or opposing the duty suspension, a copy of the letter is also 10
The overall administration response is coordinated by the Department of Commerce (Commerce).
Analysts at Commerce also research the targeted commodities, either independently or in
conjunction with the ITC, depending on the time frame. With regard to comments on duty
suspensions, Commerce generally does not object unless a U.S. producer of a targeted commodity
is found. In most cases, intra-company transfers (instances in which a multinational with a
subsidiary in the United States imports a product manufactured in a plant owned by the same
company overseas) are also not opposed, even if a like product is manufactured in the United
Customs and Border Protection also comments on duty suspensions, largely by recommending
reclassifications or changes in nomenclature for ease in administering the proposed tariff changes.
CBP has a formal agreement to share this information with the ITC, and may also provide
information to other agencies. However, if certain measures impact CBP more directly (e.g.,
changes in duty drawback statutes, legislative responses to CBP rulings, liquidations and
reliquidations, or permanent duty suspensions), CBP will generally communicate directly to the
committees on a confidential basis.
The Office of the United States Trade Representative (USTR) may also comment on individual
duty suspension bills, but generally focuses on larger issues in the legislation that would more
permanently affect U.S. trade policy. However, USTR officials indicate that the administration
usually prefers that any tariff modifications in MTBs are temporary, so that more permanent
revisions of duties can continue to be used in trade negotiations to seek reciprocal tariff benefits
for U.S. exports.
Tariffs on many products have been revised gradually downward over a period of almost seven
decades as a result of bilateral and multilateral trade negotiations. Many economists believe that
lower foreign tariffs benefit U.S. exporters because they make U.S. goods more competitive in
foreign markets, and that lower U.S. tariffs can benefit domestic manufacturers and consumers
because the cost savings on imported goods may be passed on consumers or to other
“downstream” producers, ultimately resulting in lower costs of the finished products. However,
tariffs may also be used protectively in an effort to help domestic industries remain competitive—
especially those considered vulnerable to foreign imports, such as agriculture, textiles, and steel.
10 The ITC takes no official position on duty suspension measures, but relays any domestic company support or
objections to committee staff. An example of an instance in which an objection has been raised can be found in U.S. th
International Trade Commission, Memorandum on Proposed Tariff Legislation of the 109 Congress on S. 791
(Santorum) on a proposed duty suspension on plasma flat panel screen assemblies for use in televisions
(http://hotdocs.usitc.gov/tata/hts/other/rel_doc/bill_reports/s-0791.pdf). The ITC report on S. 701 (Lautenberg)
proposing a duty suspension on sorbic acid is an example of an instance in which no domestic opposition was noted
Thus, supporters of duty suspension measures point out that since they are largely requested on
chemicals and other production inputs, they are a significant means of reducing manufacturing
costs, thus make domestic “downstream” goods more competitive. In turn, the cost savings can
ultimately be passed on to consumers in the form of lower costs for finished products. Opponents,
however, view them as an increasingly popular means by which Congress confers a benefit on
business constituents, and point to instances in which competing domestic manufacturers have
been harmed, despite the efforts of the subcommittee and administrative agencies to control their
Despite the efforts of House and Senate committees to ensure the neutrality of MTBs, insertion of
controversial measures has held up floor consideration of the legislation in the past, especially in
the Senate. However, these measures have largely dealt with trade policy concerns rather than
duty suspensions. For example, the last MTB reported out of the Senate, first introduced in 2002,
faced opposition from Senator Richard Shelby, who placed a hold on the bill because it did not
include a provision to roll back preferential access previously given to beneficiaries of the 11
Caribbean Basin Trade Partnership Act in the Trade Act of 2002 (P.L. 107-210). Other
provisions, including one proposing to grant normal trade relations status to Laos, one to repeal
the Antidumping Act of 1916 (pursuant to a WTO ruling) and another providing a trust for U.S. 12
wool producers also met with objections. Ultimately, the bill passed in late 2004 (P.L. 108-429).
The two-year legislative fight reportedly led to the reluctance of then-Chairman Grassley to th13
report out a miscellaneous trade bill in the 109 Congress.
Due to the requirement that suspensions are “non-controversial,” requests that seem to give one
domestic company or industry a competitive advantage over another, or that meet with opposition
from a domestic producer, are generally not considered for inclusion in an MTB. However, an
historical review of MTB legislation shows there are several other reasons that duty suspensions
may merit congressional attention.
First, in some cases, a higher tariff rate may apply to a relatively noncompetitive product because
it is aggregated in a Harmonized Tariff Schedule (HTS) heading or subheading with similar
commodities that are considered more competitive. This is often the case where certain chemical
compounds are concerned.
Second, there might be no current domestic production of a particular commodity, or it might not
be produced in sufficient quantities to satisfy domestic demand. As a result, U.S. producers who
use the commodity as manufacturing input may have to depend on imports. In this case, a duty
suspension could lower the overall price of the good without significant harm to domestic
Third, the duty rate of a component essential in the manufacture of a domestic product may be
higher than that on the comparable imported finished good. One example of this was a case in
11 The Senator insisted that the preferential access of socks from Caribbean nations needed to be rolled back because it
was harmful to Alabama sock producers. Letter to Senator Charles Grassley, Chairman of the Senate Finance
Committee, from Senators Richard Shelby and Jeff Sessions, October 4, 2002.
12 Inside U.S. Trade, “Miscellaneous Tariff Bill Approved, Supporters Seek New Approach,” November 26, 2004.
13 Inside U.S. Trade, “Grassley Likely to Work Miscellaneous Trade Bill if House Acts,” February 10, 2006.
which casein button blanks used by U.S. button manufacturers were imported at 22.1% ad
valorem, while finished buttons were imported at a rate of 6.9% ad valorem. Domestic producers
complained that they were put at a competitive disadvantage vis-à-vis foreign manufacturers of 14
the same product because of the higher duty rate for the raw material.
Fourth, multinational corporations sometimes manufacture commodities at foreign subsidiaries
and import them to be used as components in domestically produced merchandise. For example, a
U.S. automobile manufacturer may fabricate some of its car parts in a plant in Guatemala, and
then import the parts into the United States, where it assembles the finished product. Congress
sometimes considers duty suspensions in these cases, because the importing company would
probably not purchase it from a domestic producer.
Fifth, nonprofit associations may wish to import an item and request a one-time duty suspension
for the product. For example, churches have sometimes requested duty-free status for pipe organs
purchased from Europe, and an educational institution has been allowed duty-free status for parts
used in the construction of a telescope.
A sixth, less frequent, reason for congressional approval of duty suspension legislation is th
compelling national interest. For example, in 1942, the 77 Congress considered the suspension
of import duties on all scrap metal because the War Production Board predicted a shortage of as
much as 6.5 million tons of metal necessary for the defense industry to operate its open hearth 15
and electric furnaces at full capacity. The Board recommended that all barriers to importing
these metals be dropped. The bill passed both chambers by unanimous consent.
Table 1. Miscellaneous Trade Legislation, 97th Congress to the Present
Congress Bill No./Sponsor Reports Status
110th 11/1/2007: House Ways and Means
Trade Subcte. Advisory requesting MTB
legislation by Dec. 14, 2007.
109th H.R. 6406 (Thomas)/H.R. No published reports. 12/8/2006: H.R. 6406 passed House.
6111 (Tauscher). 12/9/2006: H.R. 6111 (including
provisions of 6406) passed Senate.
12/20/2006: P.L. 109-432, in Tax Relief
and Health Care Act of 2006.
109th H.R. 4 (Boehner) contained No published reports. 8/17/2006: P.L. 109-280, in the Pension
about 300 duty suspension Protection Act of 2006.
109th H.R. 4944 (Shaw) No published reports. 3/15/2006: passed House.
108th H.R. 1047 (Crane) H.Rept. 108-771 12/3/2004: P.L. 108-429, the
(conference report) Miscellaneous Trade and Technical
Corrections Act of 2004.
107th H.R. 5385 (Crane) No published reports. 10/7/2002: passed House.
14 P.L. 97-446, 96 Stat. 2329.
15 U.S. Congress. Senate. Committee on Finance. Hearing to Suspend Tariffs on Scrap Metals; to Amend the Internal
Revenue Code Relating to Production of Alcohol; to Amend Internal Revenue Code Relating to the Leakage and th
Evaporation of Distilled Spirits, 77 Congress, Second Session, March 5, 1942.
Congress Bill No./Sponsor Reports Status
106th H.R. 4868 (Crane) H.Rept. 106-789 11/9/2000: P.L. 106-476, the Tariff
S.Rept. 106-503 Suspension and Trade Act of 2000.
106th H.R. 435 (Archer) see H.Rept. 105-367 (on 6/25/1999: P.L. 106-36, the Miscellaneous
related bill H.R. 2622 in thTariff and Technical Correction Act of
see S.Rept. 106-2 (on
related bill S. 262)
105th H.R. 4856 (Archer) see H.Rept. 105-367 (on 10/20/1998: passed House.
rel. bill H.R. 2622).
see S.Rept. 105-356 (on rel.
bill H.R. 4342)
105th H.R. 4342 (Crane) H.Rept. 105-671; 8/4/1998: passed House.
104th H.R. 3815 (Crane) H.Rept. 104-718 10/11/1996: P.L. 104-295, the
S.Rept. 104-393 Miscellaneous Trade and Technical
Corrections Act of 1996.
103rd H.R. 5110 (Gephardt) H.Rept. 103-826, parts 1 12/8/1998: became P.L. 103-465. Uruguay
and 2. (See S.Rept. 103-421 Round Implementation bill; see Subtitle B,
on related bill S. 2467) Tariff Modifications, secs. 112-116.
102nd H.R. 4318 (Gibbons) H.Rept. 102-634 7/31/1992: passed House.
101st H.R. 1594 (Gibbons) see H.Rept. 101-427 (on 8/20/1990: P.L. 101-382, the Customs
related bill H.R. 4328) and Trade Act of 1990.
H.Rept. 101-650 (conf. rpt.)
100th H.R. 4848 (Rostenkowski) see H.Rept. 100-40 (on rel. 8/23/1988: P.L. 100-418, subtitle G, Tariff
bill H.R. 3); Provisions
H.Rept. 100-576 (conf. rpt.)
98th H.R. 3398 (Gibbons) H.Rept. 98-267; 10/30/1984: P.L. 98-573, the Trade and
S.Rept. 98-308 Tariff Act of 1984, Title 1.
97th H.R. 4566 (Gibbons) H.Rept. 97-257 10/12/1983: P.L. 97-446, the Educational,
S.Rept. 97-564 Scientific, and Cultural Materials
Importation Act of 1982
Vivian C. Jones
Specialist in International Trade and Finance