On October 11, 2019, the United States International Trade Commission (ITC) opened its portal to receive petitions for the establishment of temporary duty suspension or reduction measures. The portal, established pursuant to the American Manufacturing Competitiveness Act (AMCA), will remain open for applications through 5:15 P.M. on December 10, 2019.

More than 1,800 petitions for duty suspensions or reductions were approved in the last round of AMCA petitions, and an equal or greater number of petitions are expected to be granted in the current round.

The Duty Suspension Process

Historically, Congress has passed legislation to temporarily suspend or reduce duty rates on particular imported goods. This was done in cases where identical or competitive articles were not available from United States sources, or where the imported product is used in value-added United States manufacturing, and the revenue loss impact from suspending or reducing duties is limited – no more than $500,000 in duty collections per measure per year. Historically, individual Congressional representatives introduced individual duty suspension bills as a matter of constituent service. In each Congress, these bills would typically be combined into a consolidated measure, and enacted separately or as part of related trade legislation.

The AMCA created a new, streamlined procedure for duty suspensions, directing the ITC to collect and evaluate petitions for duty suspensions or reductions. After the petitions are subjected to interagency review, the ITC then proposes a package of suspension and reduction measures for enactment. Congress may remove items from the ITC package, but may not add new items which have not been vetted through the agency process.

The AMCA authorized two three-year cycles for this new process. The current cycle is the second. Most observers hope that Congress will make the AMCA process permanent.

Elements of a Duty Suspension Petition

Petitions are submitted using a template on the ITC’s website. Companies seeking duty suspensions or reductions need to provide a clear, administrable description of the product for which they are seeking a suspension, identify its tariff classification, and provide data concerning historical and future imports of the product. Petitions are posted for public comment, and interested parties have an opportunity to support or oppose them. A credible opposition from a domestic producer is generally, but not always, sufficient to derail a suspension measure.

Historically, duty suspensions have been extensively used for pharmaceuticals and chemicals which are under patent protection, as well as for “niche” manufactured products for which little interest in domestic manufacturing exists. In recent years, more consumer products have benefited from duty suspensions, including such items as footwear, apparel accessories, and household appliances.

Duty suspensions and reductions granted in the first round of AMCA petitions are scheduled to expire December 31, 2020. Firms wishing to renew these measures must file new applications in the AMCA portal. The statutory timetable calls for the ITC to produce a package of proposed suspensions and reductions, and for Congress to enact same in 2020, with the new measures effective beginning January 1, 2021 for a period of three years. It is important to note that the AMCA provides for temporary reductions of regular Customs duties, and will not affect Section 232 duties on steel and aluminum products or Section 301 tariffs on Chinese goods. Separate product exclusion processes for those regimes have been set up by the Commerce Department and the United States Trade Representative, respectively.

Assistance with Petitions

Our firm has assisted many companies in obtaining duty suspensions and reductions under the AMCA. For additional information or assistance regarding the duty suspension procedure, please feel free to contact us.