NEW YORK (ICIS)--The US Miscellaneous Tariff Bill Act of 2018 (MTB) does not void any of the 25% tariffs on a combined $50bn of Chinese imports, but simply reduces existing “normal” tariff rates on all the imports listed to zero or reduces them significantly for three years.
Of the over 1,600 products listed in the MTB - which became law on 13 September - chemicals comprise over 50%, and this amount is around 60% including finished plastics products, according to the American Chemistry Council (ACC).
However, these include imports from all countries – not just China. And the MTB only reduces or eliminates the base or “normal” duties on all these imports, noted the ACC.
Any special or “additional” tariffs such as the 25% tariffs the US imposed on $34bn in Chinese imports in round 1, and $16bn in round 2 still apply.
The MTB also does not prevent the additional tariffs in the US proposed third round of tariffs on $200bn in Chinese imports from taking effect.
However, the MTB could reduce the impact of US tariffs on Chinese chemical imports appearing on that MTB list on a net basis.
For example, a chemical with a 5% “normal” import duty that is on the MTB list and on the US list of 25% tariffs on Chinese imports would be exempt from the 5% duty but would still come under 25% tariff if it came from China.
Another chemical with a 5% “normal” duty that is not on the MTB list, would still retain that 5% duty, plus another 25% tariff if that product was imported from China.
Chemicals were not included in the first round of US tariffs on Chinese imports – only in the second round. And the third round includes many more chemicals and especially more finished plastics imports.
The ACC still welcomes the signing of the MTB into law, as it reduces or eliminates duties on many chemical imports – not just those from China.
“By signing MTB into law, the President has affirmed his support for U.S. chemicals manufacturers who rely on select foreign inputs to retain our position as the world’s leading, low-cost producer of chemicals,” the ACC said in a statement.
“We hope the success of the MTB will help the President see that a zero-tariff policy that helps create new markets for producers and brings innovative products of chemistry to new regions is the best course for US trade policy,” it added.
The MTB as it stands today was set in motion by Congress in 2016 with the passage of the American Manufacturing Competitiveness Act of 2016 (AMCA), which established a process to consider the elimination of individual import taxes for products not made or available in the US, noted the National Association of Manufacturers (NAM).
The MTB as a bill was introduced in the House of Representatives in November 2017 and passed in January 2018. The Senate passed the bill in July with changes, and then the House passed the final bill in September. With the urging of many US trade groups including the ACC, President Trump signed the bill into law on 13 September.
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Focus article by Joseph Chang