The Daily Caller

The Daily Caller
Workers assemble Motorola phones at the Flextronics plant that will be building the new Motorola smart phone "MotoX" in Fort Worth, Texas September 10, 2013. The factory is a high-profile endorsement for "onshore" manufacturing in the U.S. REUTERS/Mike Stone Workers assemble Motorola phones at the Flextronics plant that will be building the new Motorola smart phone "MotoX" in Fort Worth, Texas September 10, 2013. The factory is a high-profile endorsement for "onshore" manufacturing in the U.S. REUTERS/Mike Stone  

Manufacturers Want The Tariff Bill They’ve Waited On Since 2012

Photo of Jay Timmons
Jay Timmons
CEO, National Association of Manufacturers

Lasko Products is the last of its kind in the United States. The Pennsylvania manufacturer is the only domestic maker of portable fans. While fan production has shifted to China, Lasko has held on, maintaining manufacturing facilities in Pennsylvania and Tennessee.

Competing with fans imported from China isn’t easy, especially when Lasko has to pay artificially inflated prices for materials that are used to make the fans. The high prices are due to punitive tariffs and the failure to reduce these taxes on manufacturers. As a result, Lasko has had to scale back production, threatening its ability to retain and create new manufacturing jobs.

The plight of manufacturers like Lasko isn’t lost on lawmakers. They understand the inequity of this situation and, for decades, passed so-called Miscellaneous Tariff Bills (MTBs) suspending these tariffs — until late 2012, when despite agreements on the merits of an MTB, controversy over the process scuttled any chance of getting a bill to the president’s desk. Nothing has changed since.

Congress isn’t known for acting quickly. But missing a deadline by more than 500 days? That’s excessive by even Washington’s standards.

Manufacturers have no choice but to pay these import taxes since these materials are not available in the United States; they must be brought in from foreign countries. In other words, manufacturers are being taxed for doing their job — manufacturing the products we depend on every day.

Consequently, manufacturers have faced added costs — and, as a result, added competitive pressures — over the past 18 months. Lasko is just one of many companies bearing burdens that an MTB could relieve.

LANXESS Corporation, a chemical manufacturer, has 13 facilities and employs 1,300 people in the United States. An MTB would help LANXESS expand its manufacturing domestically.

For FMC Corporation, which makes crop protection products and specialty chemicals and materials, the savings reaped from an MTB results in more investment to support their manufacturing operations in the United States.

An MTB could also help the revival of an industry that was once extinct in the United States: television manufacturing. Earlier this year, Element Electronics opened its doors in South Carolina, making it one of the only companies to manufacture televisions in the United States in more than a decade. Element has bold plans — to more than double its workforce by 2018 — and the MTB can help ensure Element’s competitiveness and achieve its growth goals.

In 2006, Ping, a golf equipment company, closed its manufacturing facility in Mexico and moved production to the United States, thanks to the elimination of import taxes on materials used in golf bags. Today, however, PING must pay a penalty for manufacturing in the United States.

These manufacturers represent just a fraction of the businesses and their employees who would benefit from the MTB. All told, passage of the MTB would save manufacturers $748 million and stave off almost $2 billion in economic losses over the next three years. For an economy that shrank in the first quarter of this year, those numbers are nothing to scoff at.

Despite strong bipartisan support, this critical jobs bill continues to languish. The MTB is exactly the type of measure that Congress should be considering as our economy continues struggling to get back on its feet. Congressional inaction on this measure over the past 18 months has undermined manufacturing and is costing America jobs. Leaders in Congress need to take action now to end this tax on manufacturers.