A prominent big box retailer recently asked the Department of Commerce for a reduction in the duties on imported pet leashes because they claimed that no one makes them here in the US. I considered that odd since my company, based in Rhode Island, makes them by the thousands every year. And if I weren’t paying attention, the retailer would have been able to get the duties reduced or eliminated. This is a real world example of how trade policy made in Washington DC goes wrong and how it has a direct negative impact on US manufacturing.
By now you’re probably wondering what policy would allow this to happen. The answer is something called a Miscellaneous Tariff Bill (MTB). Ironically, MTBs were created to help US manufacturers. Their purpose was to allow manufacturing companies to more cheaply import parts that were not available from US vendors. Sounds like a good plan, doesn’t it?
So how does a big box retailer end up with the wherewithal to import finished products with reduced or eliminated duties? Quite simply, there’s no one minding the store. The MTB process should be reserved for prime US manufacturers (not big box retailers) who are sourcing inputs (not finished products) that are unavailable domestically. Instead, it appears that any type of company can request the reduction of duties on any type of finished product. And in the event that the US based manufacturer of that product isn’t combing these MTBs to figure out who is requesting reduced duties on what, we end up with situations like mine. Of course, that means that I have to pay attention every time an MTB is posted and spend my time carefully perusing it, instead of running my company.
Earlier this month, I was on Capitol Hill spreading the word about how this policy designed to help manufacturers was, in some cases, hurting us. I’m hoping they listened and will get it right this time.