Tariff Cuts Jeopardized

In their effort last week to do something to halt politically damaging earmarks, Republicans in the House of Representatives may have cost chemical companies millions of dollars in import tariffs.

The Republican decision to impose a one-year moratorium on inserting special interest projects into government spending bills included the term "limited tariff benefit" in its list of banned requests. This action has raised concern because banning tariff benefits could delay passing of or kill the miscellaneous tariff suspensions bill (H.R. 4380) presently in Congress. This bill eliminates import duties on hundreds of items, most of them chemicals.

Suspension of tariffs for specific products is requested every year by hundreds of companies and Democrats and Republicans insert these requests into a single bill so they can be passed all at once. The requests are vetted by the Administration and each must cost the Treasury less than $500,000 per year. Chemical substances comprise a large number of the requests and the suspensions add up to many millions of dollars of savings to companies importing these items.

William E. Allmond IV, vice president for government relations for the Society of Chemical Manufacturers & Affiliates, says SOCMA is disappointed in the Republican move. "These tariff suspensions really help companies," Allmond says. "Any further delay in this process is putting many small companies in our industry at a financial disadvantage in trying to compete globally."

The American Chemistry Council, a trade group representing the largest U.S. chemical manufacturers, did not comment directly on the Republican ban, but, in a statement, emphasized the importance of eliminating tariffs in global chemical markets.