Since the early 1980s, almost every Congress has passed a Miscellaneous Tariff Bill, which is a compilation of individual requests for temporary suspensions of import duties on specific products sponsored by House members and senators. Most duty suspension requests concern imports of intermediate goods or industrial inputs used by U.S. companies in their own production processes.
Some Republicans claim that duty suspensions benefitting fewer than 10 entities meet the House definition of an earmark, and should be opposed on those grounds. But there is simply no way of knowing before hand how many entities will benefit because the cost reduction associated with the waived duties is likely to spur unforeseen demand — new industrial uses for the input, new firms attracted to the industry, lower prices delivered down the supply chain to more and more end‐users, etc.
There are obvious benefits to the process, but the MTB doesn’t come close to approximating the potential gains from real tariff liberalization. Even to qualify for the MTB, an individual duty suspension must be “non‐controversial,” which means that there is no domestic production of the item and that the loss of tariff revenue from each suspension will not exceed $500,000 per year. Because of the temporary nature of the tax break and the tight restrictions concerning reduced tariff revenues, the scope for gains is limited. Of course that doesn’t stop politicians from talking up the benefits.
Here’s how President Obama characterized the last MTB upon signing it into law in 2010: