American manufacturing—once the pride of our nation and the envy of the world—is struggling. Foreign competition couldn’t beat it, but our own domestic regulation and taxes are crushing it to death. That is something we can change. Congress has the opportunity to lighten those government burdens enough to revive this great engine of American prosperity.
American manufacturers often rely on resources and materials in short supply in the United States. That means they have to import them in order to manufacture goods for both American consumers and for export. When these resources are hit with a tariff—that is, an import tax—at our border, companies have to pay more for these necessities, increasing their costs. Reducing or suspending these tariffs keeps costs down, makes American manufacturers more competitive, and may be the difference between survival and failure in today’s competitive international economy.
In the past, companies have often found relief from these discriminatory taxes by marshalling lobbyists and befriending politicians to introduce special exemptions. These special bills would then be reviewed by the International Trade Commission (ITC), which would advise Congress on a package of tariff suspensions, known as the Miscellaneous Tariff Bill (MTB). However, criticisms of this process, particularly its lack of transparency and its dependence on businesses having special access to Members of Congress, have prevented Congress from considering MTB legislation since 2010. As a result, American manufacturing has experienced an effective tax hike of $748 million and the U.S. economy has seen a $1.875 billion loss, according to the National Association of Manufacturers.
Duty suspension bills got caught in the earmark ban because the process reflected many of the markers you would find in a “pay-to-play” scheme. But, at the core, duty suspensions help domestic manufacturers. This is tax relief, not directed spending.
We believe that the original MTB process was flawed because it forced companies to beg Congressmen to introduce bills to reduce duties for particular products, in effect giving individual congressman life or death say in the survival of these businesses. We believe that it is time for Congress to institute a more streamlined and transparent process to consider the MTB that does not depend on whether a company has political access and influence.
That’s why we are supporting H.R. 4923, which reforms the MTB process by leveling the playing field and also adhering to Congress’s recent ban on special interest exemptions.
Our reform legislation will allow businesses in need of tariff relief to submit their requests directly to the ITC to be independently reviewed, without having to camp out at congressional offices. The ITC will then be able to carefully examine each request away from the highly partisan atmosphere of Congress and then present its independent recommendations, based on the facts, not politics.
As manufacturers in our districts struggle to remain viable in a global economy, we should all support streamlining America’s byzantine bureaucracy. The reformed process will ensure that small companies have equal access to tax relief.
For example, Nation Ford Chemical is a family-owned small business in Fort Mill, South Carolina. Founded in 1977, and specializing in custom, organic chemicals, Nation Ford’s products supply the U.S. Armed Forces and many large companies. According to Jay Dickson, President of Nation Ford, “without the MTB in place, we have spent over $100,000 annually… which is money that would have been reinvested in the company for growth and job creation”. The additional import duties have impacted the cost of their products, and made them less competitive.
There are companies – big and small – that share this story. Bimax Chemicals imports a product from China, then transforms the product at their plant in Glen Rock, Pennsylvania before exporting the product back to China – paying duties each way. These additional costs threaten Bimax’s competiveness and restricts its ability to reinvest and grow from its current 75 employees.
Sun Chemical has employees in Muskegon, Michigan, Cincinnati, Ohio, Amelia, Ohio, New Brunswick, New Jersey and Goose Creek, South Carolina. Access to duty suspensions could help Sun save more than $3,000,000 on raw materials.
American discontent with the federal government is well-founded, and our manufacturing sector has suffered from federal mismanagement in the form of excessive regulations and an outdated and punitive tax code. We have a chance to reverse course. It’s time for leaders to side with American manufacturing and restore a degree of public trust in America’s institutions. Moving forward on an open, independent and transparent MTB process is a good start.
A revamped and renewed MTB process will make domestic manufactures more competitive in the international marketplace and help our struggling economy.
Republican Tom McClintock represents California's 4th congressional district in the U.S. House of Representatives. Republican Mark Walker represents North Carolina's 6th congressional district in the U.S. House of Representatives. Republican Mick Mulvaney represents South Carolina's 5th congressional district. Republican Jeff Duncan represents South Carolina's 3rd congressional district in the U.S. House of Representatives.