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Comparison with Present Law
Tartaric acid is classified under TSUS item 425.94 with a column 1 duty rate of 5.1 percent ad valorem, an LDDC rate of 4.3 percent ad valorem, and a column 2 duty rate of 17 percent ad valorem. Tartar emetic is classified under TSUS item 426.72 with a column 1 duty rate of 1.9 percent ad valorem, an LDDC rate of 1.8 percent ad valorem, and a column 2 duty rate of 4 percent ad valorem. Cream of tartar is classified under TSUS item 426.76 with a column 1 duty rate of 5.5 percent ad valorem, an LDDC rate of 4.6 percent ad valorem, and a column 2 duty rate of 11 percent ad valorem. Rochelle salt is classified under TSUS item 426.82 with a column 1 duty rate of 4.7 percent ad valorem, an LDDC rate of 4.1 percent ad valorem, and a column 2 duty rate of 11.5 percent ad valorem.
Imports under all four of the above tariff provisions, if from designated beneficiary countries, are eligible for duty-free entry under the Generalized System of Preferences (GSP). Imports from designated Caribbean Basin countries are eligible for dutyfree entry in accordance with the Caribbean Basin Initiative (CBI). Items 425.94, 426.72, 426.76 and 426.82, TSUS, are subject to staged tariff rate reductions as indicated by the table on the following page.
Effect on Revenue
If the import quantities and price levels of 1983 remained unchanged, the potential annual loss of revenue would amount to approximately $171,000. However, the quantity of imports of tartaric chemicals is expected to increase and the rates of duty are undergoing staged reductions. The result of these two interactions on potential revenues is unknown at the present time.
The Department of Commerce has no objection to enactment of H.R. 4513.
The International Trade Commission submitted an informative report.
On June 27, 1984, the Subcommittee on Trade ordered H.R. 4513 favorably reported to the full Committee on Ways and Means by voice vote, with an amendment to provide for the retroactive application of this provision to June 30, 1984, the date that the existing provision expired.
A companion bill (S. 2493) was introduced by Senator Moynihan.
Department of Commerce: No objection to enactment of H.R. 4513
Statements for the Record
The Honorable Bill Green, M.C. (N.Y.): Since the suspension has been in effect, purchasers and users of tartrates have benefitted, and there has been no adverse impact on any domestic producer or on the labor market. Pharmaceutical manufacturers have benefitted from lower production costs for goods requiring tartrates raw materials, and the industry is not aware of any new efforts to produce tartrates in the United States.
Pfizer, Inc., and Tartaric Chemicals Corporation: The current suspension has benefitted importers and purchasers of these products without adversely affecting any domestic industry or workers, and without resulting in any significant loss of tariff revenue to the U.S. Treasury.
To extend duty-free treatment to imports of chipper knife
Summary of the Provision
H.R. 4765, if enacted, would provide for permanent dutyfree treatment to imports of chipper knife steel which is not cold formed.
H.R. 4765, if enacted, would amend item 606.93 in subpart B of part 2 of schedule 6 of the Tariff Schedules of the United States (TSUS) to provide permanent duty-free treatment to imports of chipper knife steel which is not cold formed. The column 2 rate of duty would remain unchanged.
Section 2 provides that the amendments would become effective for articles entered after December 31, 1984.
Background and Justification
"Chipper knife steel" is defined in headnote 2 (h) (viii) of part 2B of schedule 6 as
"alloy tool steel which contains, in addition to iron, each of the following elements by weight in the amount specified:
not less than 0.20 nor more than 0.55 percent."
Tool steels are used primarily to make tools capable of cutting, forming, or otherwise shaping other materials in the manufacture of virtually all industrial products. They are made in small lots and under very high quality-control conditions. Tool steels, produced largely in the form of rods or bars, are noted for their hardness, abrasive resistance, and heat resistance.
Virtually all of the particular type of alloy tool steel described in this legislation is used to make chipper knives. These knives are used in machines that chip trees and other wood to make pulp and wood fiber products. The wood chips produced by chipper knives have a variety of uses, including treatment of sewage, production of paper and corrugated boxes, and landscaping.
Although a number of domestic specialty steel producers are technically capable of manufacturing chipper knife alloy tool steel, there is only one known U.S. producer: Jessop Steel Corp., Washington, Pennsylvania.
Jessop produces its chipper knife bars by manufacturing chipper knife plate, for which bars are cut. The firm apparently has limitations on the sizes and tolerances of the chipper knife bars it can provide. Total domestic production is estimated at approximately 30 tons in 1983, valued at approximately $60,000.
Apparent U.S. consumption is estimated at approximately 2,000 tons in 1983. Four chipper knife manufacturers are reported to consume almost all of the chipper knife steel imported into or manufactured in the United States. The cost of such alloy tool steel represents approximately 80 percent of the cost of manufacturing the finished product; i.e., the chipper knife.
There were believed to be no exports of chipper knife steel in 1983.
Data on imports of chipper knife alloy tool steel are not separately detailed before 1980. Imports of chipper knife steel not cold formed were 1,896 tons in 1983 valued at $3.1 million. Imports from 1980-83 have ranged from 1,370 to 1,840 tons annually. It is estimated that imports of such chipper knife steel supply virtually all of total domestic consumption. Major export sources of chipper knife steel, not cold formed, are West Germany, Sweden, and Japan.
Comparison with Present Law
Chipper knife alloy tool steel, not cold formed, is provided for in TSUS item 606.93, subpart B, part 2, schedule 6 of the TSUS at a column 1 rate of duty of 8.3 percent ad valorem plus additional duties on certain alloys, and a column 2 rate of duty of 28 percent ad valorem plus additional duties on certain alloys. However, TSUS item 911.29 in the Appendix to the TSUS provides for the temporary reduction of the column 1 duty rate for chipper knife steel (provided for in TSUS 606.93) to 4.0 percent ad valorem until December 31, 1984.
Under the Trade Agreements Act of 1979, the final column 1 rate of this item will be reduced in stages to 6 percent ad valorem plus additional duties effective January 1, 1987.
Articles entered under TSUS item 606.93 have not been designated eligible for duty-free treatment under the Generalized System of Preferences (GSP). Other types of chipper knife steel are imported under eight separate TSUS item numbers. These imports are not affected by the proposed legislation.
Finished chipper knives are classified under the provisions for other "knives and cutting blades for power or hand machines, other than agricultural or horticultural machines and for shoe machinery" (TSUS item 649.67). Articles entered under TSUS item 649.67 are dutiable at a column 1 rate of 4.2 percent ad valorem and a column 2 rate of 20 percent ad valorem. These products have been designated as eligible articles for the GSP.
Effect on Revenue
Based upon duties collected in 1983 on chipper knife steel, not cold formed, potential revenue loss should be approximately $140,000.
The Department of Commerce had no objection to enactment of H.R. 4765.