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Trump signs MTB Act to decrease tariffs, China Imports still benefit

MTB Act Creates Decreased Tariffs!   

On September 13, 2018, President Trump signed into law: H.R. 4318, the “Miscellaneous Tariff Bill Act of 2018,” which provides for duty suspensions and reductions for certain products entered into consumption on October 13, 2018 through December 31, 2020.

The Miscellaneous Tariff Bill (MTB) reduces or completely eliminates duty on 1,660 imported products not manufactured or available domestically.  This is BIG news for manufacturers!  Even if you’re a manufacturer importing from China, you can benefit!

Because several of the products that qualify for a reduced duty rate are from China, they are subject to Section 301 additional tariffs.  So, although an importer may have just discovered its  qualification for duty reduction, it will still need to consider the additional 25% (as of January 1, 2019) on required HTS numbers from China…. but at least the importer will still benefit since it is not required to pay the entire sum of the two duty rates had the MTB Act not passed.

Section 301 

On August 18, 2017, The United State Trade Representative initiated an investigation into certain acts, policies and practices of the Government of China related to technology transfer, intellectual property and innovation (82 FR 40213). During the investigation, the Trade Representative determined that the acts, policies and practices of China under investigation are unreasonable or discriminatory and burden or restrict U.S. commerce, and are thus actionable under Section 301(b) of the Trade Act of 1974, as amended (Trade Act).

In response, President Trump initiated a number of actions which imposed ad valorem tariffs on certain imports originating in China. List 1, effective July 6, 2018 places an additional duty rate of 25% on $34 billion worth of goods from China.  List 2, effective August 23, 2018 places an additional duty rate of 25% on $16 billion worth of goods from China.  List 3, effective September 24, 2018 places an additional 10% on $200 billion worth of goods from China, and an increase up to 25% of these goods was imposed on June 15, 2019.  List 1, 2, and 3 tariffs currently at 25% will jump to 30% on October 15, 2019.  There are some exceptions to these tariffs through a product exclusion process.  List 4a is scheduled for September 1, 2019 and List 4b is scheduled for December 15, 2019, both currently at a 15% ad valorem duty rate.  To get the most up to date information, visit our Section 301 Debriefing Page.

So, how do I know if the MTBA 2018 will affect our company?

The best way to see if the MTBA 2018 will affect you is to check it out here, or you can download it as a PDF. The document is over 500 pages.  Press Ctrl + F to do a quick search for your HTS number.

How can I figure out my duty rate?

One way is by checking the actual Miscellaneous Tariff Bill Act of 2018 text to see if your HTS number is present or you can download our excel spreadsheet to look up your current HTS number, then look at the provisional tariff numbers (Chapter 99) that can be used to apply for a MTB reduction in duty when filing your entry.  Note, your entry will include both numbers.  The spreadsheet also shows the new duty rate, so long as the product doesn’t apply for any other additional tariffs.  If your product originates in China, you can use the following examples as a guideline to find your new duty rate or simply refer to our excel spreadsheet which does the calculation for you, assuming all products from China will eventually move to an additional 25% duty rate in the near future.

Although products are still subject to Section 301, an importer will still see benefit from the signing of the Miscellaneous Tariff Bill (MTB) of 2018.

Example One:

Because of the MTB Act, one’s duty rate on Product A decreases from 15% to 2.5% but still subject to Section 301 tariff of 25%.  Therefore, the overall duty rate for product A will equal 27.5% as opposed to 40% in duty if MTB did not exist on this product.

MTB Act Section 301 Tariff


Another example. 

If one’s duty rate on Product B decreases to 0% or duty free, and originates in China, it is subject to the Section 301 tariffs.  Therefore, the overall duty rate will be 25% duty in total.

The MTB Act is a Good Thing

The last MTB passed by Congress expired on December 31, 2012. Since then, businesses have paid billions of dollars of tariffs on imported products.  “The Trump Administration’s passage of the Miscellaneous Tariff Bill Act of 2018 will bolster manufacturers in the United States, especially small- and medium-sized manufacturers, in industries ranging from chemicals, agriculture, textiles and footwear to electrical equipment, machinery and sporting equipment. The Miscellaneous Tariff Bill Act of 2018 will eliminate import tariffs of more than $1.1 billion over the next three years and boost U.S. manufacturing output by more than $3.1 billion”, states The National Association of Manufacturers.


How to Read the MTB Act 2018

MTB Act 2018 How to Read


For more Information:

NAM Statement  MTB Text MTB Spreadsheet

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