Business ups pressure for tariff relief

The U.S. Chamber of Commerce and the National Association of Manufacturers (NAM) are pressuring Congress to complete work on a long-delayed tariff overhaul that would reduce costs for their businesses. 

The two powerhouse groups say there is growing momentum on Capitol Hill to lower or eliminate tariffs on hundreds of imported production components that are not manufactured in the United States.

{mosads}Christopher Wenk, executive director of international policy at the U.S. Chamber of Commerce, said the “stars are aligning” for tariff legislation after years of delays. The last package expired at the end of 2012.

“Once the bill comes out and the hearing happens, it will take this effort into the next phase, and there’s a desire on the Hill to get moving very quickly,” Wenk said. 

The Chamber plans to pound the pavement in the coming days, when legislative activity around tariffs is expected to pick up.

House Ways and Means Committee Chairman Kevin Brady (R-Texas) could release legislation on tariffs as early as this week, while his panel’s trade subcommittee will explore the topic during a hearing Thursday afternoon. 

“We’ll be up there pushing for it because there’s a big role for the business community to be playing,” Wenk said. 

Linda Dempsey, vice president of international affairs with NAM, said her members remain hopeful that a bill can get done soon.

“We’re doing everything we can to move the process along quickly,” Dempsey said. 

She argued that there is a “time-sensitive nature” to the tariff measure because there are “a lot of headwinds in the global economy” that have hampered manufacturing growth.

“Eliminating taxes on products we don’t make here would be an easy path forward to helping the manufacturing sector,” she said. 

Business groups have been pushing for a new miscellaneous tariff bill for years, writing frequent letters to Congress that have been endorsed by hundreds of trade associations.

The measure is considered the fifth and final piece of a legislative package that started moving through Congress last summer and included trade promotion authority and, earlier this year, a customs enforcement measure. 

After three decades of easily moving through Congress, a miscellaneous tariff overhaul was held up for several years because House Republican rules labeled the measures as earmarks, which are banned.

The new Ways and Means proposal aims to avoid any conflict with earmark rules by requiring businesses to go straight to the International Trade Commission (ITC) with their requests, rather than to Congress. The previous process required businesses to go through Congress first. 

The ITC would then vet the tariff waiver requests, make a determination, and send those that make the cut up to Capitol Hill for consideration, eliminating questions about lawmaker favoritism. 

Wenk said it makes sense to have the ITC jump-start the process to avoid any conflicts of interest that might otherwise arise.

House Ways and Means Trade Subcommittee Chairman Dave Reichert (R-Wash.) said last week that Thursday’s hearing on tariffs would provide an opportunity to discuss a new approach “that upholds the strong House earmark ban.” 

“It’s time to develop a fair, transparent and bipartisan process for considering manufacturing tax cuts that will help our businesses, benefit our consumers and grow our economy,” Reichert said in a hearing announcement. 

While the measure faces some hurdles — mostly a tight legislative schedule — the business groups are expressing confidence that it can pass.

One Senate aide said there is a strong bipartisan desire in Congress to address the issue, including from several committee chairmen.

Senate Finance Committee Chairman Orrin Hatch (R-Utah), for example, has expressed support for the House’s efforts. 

“I’ve long supported unilateral tariff reform, and I’m committed to working with my colleagues in Congress to see how we can get legislation to help keep costs down for American businesses across the finish line,” Hatch said. 

Sen. Ron Wyden (Ore.), the top Democrat on the Finance Committee, has also expressed optimism the Senate and House will be able to soon introduce a bill and move the process forward.

A year ago, the Senate included a bipartisan miscellaneous tariff measure from Sen. Rob Portman (R-Ohio) in an early version of the customs legislation. But the House removed the bill from the customs package earlier this year so lawmakers could work on the tariff issue separately.

Portman’s measure had sought to resolve the earmark issue as well.

The last miscellaneous tariff bill in 2010 included about 1,000 products that received reduced or eliminated tariff consideration.

NAM estimates that the expiration of the last tariff package at the end of 2012 has created an annual $748 million tax hike on manufacturing in the United States and cost the broader economy $1.9 billion.

“From a manufacturing standpoint, it is critical to move this bill as quickly as possible,” Dempsey said. 

“In many cases, manufacturers are paying taxes or tariffs on critical inputs, while the finished products are coming in duty-free.”