Important Reminder about the Miscellaneous Tariff Bill (MTB) Effective October 13, 2018

Dear Valued Customer,

As we informed you in our newsletter dated September 17, 2018, President Trump signed the Miscellaneous Tariff Bill (MTB) on September 13 and it is effective from October 13, 2018 through December 31, 2020 for certain products approved by the U.S. International Trade Commission (USITC).

What is the Miscellaneous Tariff Bill?

The MTB is legislation passed by U.S. Congress to temporarily reduce or suspend tariffs on certain imported products to boost the competitiveness of U.S. manufacturers by lowering the cost of imported inputs without harming domestic firms that produce competing products. In the case of finished goods, the MTB reduces costs for consumers where there is no domestic production and thus no impact on domestic firms. The MTB tariff relief is designed to be broadly available to any entity that imports and pays duties pursuant to the specified tariff heading and to benefit downstream producers, purchasers, and consumers.

Does your imported product qualify for a temporary tariff rate reduction under the new MTB?

Trying to figure out if an imported product qualifies for temporary duty-free entry or a reduced tariff under the MTB Act that took effect in October?

The MTB Act of 2018 created over 1600 new temporary miscellaneous tariff bill provisions that will provide a reduced tariff or duty-free treatment for a wide range of products coming into the U.S. market.

To help importers find information about these new provisions in the Harmonized Tariff Schedule (HTS), the USITC offers the following tips.

  • The new MTB provisions are found in Subchapter II of chapter 99 of the HTS
  • Be sure you are referencing the current version of the HTS — all previous provisions and notes in subchapter II of chapter 99 of the HTS were repealed and replaced by the MTB Act in October.
  • Chapters 1 through 97 of the HTS contain the HTS numbers and article descriptions that:

1)      determine how each product imported into the United States is classified and

2)      the normal trade relation (NTR) and special preference program rates of duty for the product.

  • If a product is covered by an MTB 9902 provision, a footnote has been added to its “general rate of duty” column in chapters 1 through 97.  (Note – the footnotes will be converted to end notes on January 1, 2019.)
  • To determine if a product can receive an MTB reduced tariff, find the product’s HTS classification in chapters 1 through 97, then look for a footnote in the general rate column, which will direct you to the corresponding MTB 9902 provision.  (The MTB 9902 provisions in subchapter II of chapter 99 are listed from lowest to highest HTS numbers for ease of finding the specific tariff number.)
  • Be sure to carefully read the article descriptions of the MTB 9902 provisions. Many of the MTB 9902 provisions cover specific items within a broader product category in the HTS line items in chapters 1 through 97.  Only the specific items in the MTB 9902 article description are eligible for the duty reduction. *
  • For Customs entry purposes, the importer of record claiming a 9902 provision duty reduction will need to use both the product’s HTS classification number found in chapters 1 through 97 and the corresponding 9902 provision.  The MTB duty rate is not given automatically. *
  • Important exceptions: MTB 9902 duty rates can only modify the covered products’ general duty rates indicated in chapters 1 through 97; they cannot modify additional duties imposed on products from China as a result of Presidential actions under section 301 (related to unfair trade practices) or as a result of investigations under section 232 (related to national security). Those additional tariffs must still be paid even if the general duty rate is reduced by the MTB.
  • For more information, see Revision 13 of the HTS at https://hts.usitc.gov/current or access the HTS Search Tool at https://www.usitc.gov/tariff_affairs.htm.
  • USITC staff has also developed a spreadsheet that may help users identify products, including the applicable HTS provisions that qualify for duty-free or reduced duty treatment under the new MTB.  The spreadsheet is provided for reference only; for the official compilation of products, rates of duty, and their HTS numbers, users should reference the HTS itself.  The spreadsheet can be found at: https://www.usitc.gov/sites/default/files/tariff_affairs/hts_9902_reference_file.xlsx.

*Based on the foregoing, please understand that we will not automatically claim MTB tariff reductions on your behalf. This is because even if the estimated classification of your product appears on the MTB list, we are often unable to determine MTB eligibility of your products due to limited product descriptions on your commercial invoices. As mentioned in this newsletter, not all products in chapters 1 through 97 of the HTS are eligible for MTB tariff reductions just because the HTS number has a 9902 footnote or endnote. Only certain specific products meeting the exact technical descriptions on the MTB list are eligible, and we cannot make this determination on our own.

We therefore require our clients to conduct a due-diligence review of their products for eligibility under the MTB and if any products are found to be eligible, please provide written instructions and a list containing a detailed technical description of those products and their part numbers or unique identifying product codes so that we can identify them on your commercial invoices at time of entry. If you provide us with a product classification database, please update it with the MTB references.

Please also note that although we are doing our best to alert our customers about certain commodities that may be eligible, the U.S. Customs and Border Protection has not flagged their tariff database in such a way as to alert the Filer that an MTB 9902 provision may apply. Therefore, it is possible that certain MTB claims may not have been made at the time of entry if we did not receive any written instructions.

Please understand that we cannot be held responsible if an MTB duty reduction was not applied at the time of entry for any eligible goods imported on/after October 13 if instructions were not provided. We ask our customers to conduct a post-entry audit and if you feel that certain goods were eligible, please contact us so that we can file post-summary corrections at a nominal fee to claim a refund on your behalf.

As an additional service to our clients, we will be reaching out to those of you that have imported goods since October 13 that were classified as being potentially eligible for MTB in order to obtain your concurrence of eligibility and, if necessary, work with you to file PSC claims and to ensure that such goods are identified and claimed going forward.

Questions?  Contact https://usitc.gov/tariff_affairs/hts_help

Thank you for your attention and cooperation. If you have any questions, please contact your nearest JJB representative.

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