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The International Trade Commission submitted an informative report.

Markup

On June 27, 1984, the Subcommittee on Trade ordered H.R. 4765 favorably reported to the full Committee on Ways and Means by voice vote, with a technical amendment providing for the changes to become effective after December 31, 1984, the date that the existing appendix provision expires.

SUMMARY OF TESTIMONY ON H.R. 4765

Administration

Department of Commerce: No objection to enactment of H.R. 4765.
Statements for the Record

Supports

Machine Knife Association: Congress has previously passed two temporary reductions of the rate of duty on chipper knife steel. The American chipper knife manufacturers must rely on foreign imports of chipper knife steel as their source of raw material.

Opposes

U.S.

The Specialty Steel Industy of the United States: producers of chipper knife steel have been devastated by imported chipper knife steel which is either heavily subsidized or dumped. The U.S. specialty steel industry wants only to maintain the tariff agreements already negotiated by the U.S. Government.

H.R. 4887

Introduced by: Mr. Vander Jagt

Date: February 21, 1984

To permit until January 1, 1986, the duty-free entry of megnetron tubes used in microwave cooking appliances.

Summary of the Provision

H.R. 4887, if enacted, would suspend the duty on megnetron tubes with an operating frequency of 2.450 GHZ and a minimum power of at least 300 watts and a maximum power not greater than 2000 watts until January 1, 1986.

Section-by-Section Analysis

H.R. 4887, if enacted, would amend the Appendix to the Tariff Schedules of the United States (TSUS) by inserting in numerical sequence a new item TSUS 912.12 permitting the temporary duty-free entry, from countries entitled to mostfavored-nation treatment, of certain magnetron tubes provided for in TSUS item 684.28. Magnetron tubes are used in microwave cooking appliances; some are employed in certain defense applications, such as in radar, and in telecommunications transmissions. The new provision would take effect on or after the 15th day after the date of the enactment of this Act and terminate at the close of December 31, 1986.

Background and Justification

Magnetron tubes are electronic continuous-wave oscillators which cause moving electrons, generated from heated cathodes, to revolve around microwave circuits and react with the circuits (resonate) in a process known as bunching. Radiofrequency energy is generated, usually over the microwave frequency range of 1-40 gigahertz (GHz, meaning billions of cycles per second). Those tubes having a higher power may be used in such applications as terrestrial and satellite relays (to transmit telephone, telegraph, and television signals) and radar systems. They are not intended to be covered by proposed duty suspension; nor are the tubes with lower power having many uses other than in microwave cooking appliances.

Other magnetron tubes covert 60-cycle-per-second household electricity to the ultra-high frequency radio waves known as microwaves, usually at a frequency of about 2,350 GHz, for use in microwave cooking appliance (generally ovens). The tubes when operating generate about a kilowatt of power; the microwave energy creates a strong electrical field and causes food molecules to polarize

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and align themselves in the direction of the field. As the field changes direction with each cycle, the food molecules are agitated and generate frictional heat. The amount of heat generated can be varied by turning the magnetron tube on and off. These microwaves produce heat throughout the entire mass of food instantaneously, thus permitting faster and more energy-efficient cooking.

Since there is no U.S. production and no exports, imports represent the entire source of U.S. supply and thus equal apparent consumption of magnetron tubes for use in microwave cooking appliances. Imports of all parts of cooking stoves and ranges are shown in the following table:

Parts of cooking stoves and ranges (TSUSA item 684.2890):
U.S. imports for consumption, 1978-83

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Source: Complied from official statistics of the U.S. Department of Commerce.

Industry sources estimate that in 1983 over 80 percent of these parts, or $82 million, were magnetron tubes to be incorporated in microwave cooking appliances.

Japan, the only source of U.S. imports of magnetron tubes used in microwave cooking appliances, is also the leader in world production of these magnetron tubes. Three Japanese miltinational manufacturers, Matsushita (Quasar and Panasonic), Toshiba, and Hitachi, control virtually 100 percent of the U.S. market for magnetron tubes for microwave cooking appliances. Sanyo of Japan also produces magnetron tubes, but they are used primarily for Sanyo's own production of microwave ovens. Japan's dominance in the world market is a result of its major role in the development of the microwave oven, in which the magnetron tube is an integral part. The only other known producer of magnetron tubes used for microwave cooking appliances, Samsung of the Republic of Korea, is not believed to be exporting into the U.S. market at this time.

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Comparison with Present Law

The subject magnetron tubes, if for use chiefly in microwave cooking appliances, are classified in TSUS item 684.28, covering parts of cooking stoves and ranges (including parts of microwave ovens). The current column 1 rate of duty applicable to imports under TSUS item 684.28 is 1.5 percent ad valorem. Staged tariff reductions for this TSUS item (in percent ad valorem), granted in the Tokyo round of the Multilateral Trade Negotiations (MTN), are shown below:

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Note: The 1983 column 1 ad valorem duty rate was 2 percent

The column 2 rate of duty is 35 percent ad valorem. Imports from least developed developing countries (LDDC's) currently enter free of duty, as provided under the LDDC rate of duty column.

Other magnetron tubes not chiefly used in such applicances are classified elsewhere in the TSUS based on their characteristics and intended uses. They will not be dealt with in the statistical sections of this report.

As noted above, articles classified in TSUS item 684.28 are eligible for duty-free entry under the GSP when imported from all designated beneficiary developing countries. During 1983, total GSP imports under item 684.28 were $3 million; none of these imports were of magnetron tubes. In addition, such articles if imported from designated beneficiary countries are eligible for duty-free entry under the Caribbean Basin Initiative (CBI).

Effect on Revenue

If this legislation is enacted, and if imports of magnetron tubes chiefly used in microwave cooking appliances continue at their 1983 level, there would be a total loss of about $3.1 million in customs revenues for the proposed 3-year period. This estimate takes into consideration the effect of the staged duty reductions for TSUS item 684.28, which would become permanently free of duty on January 1, 1987.

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Subcommittee Action

Agency Reports

The Department of Commerce has no objection to enactment of H.R. 4887 provided it is amended to defined more specifically the magnetron tubes covered by the legislation.

The International Trade Commission submitted an informative

report.

Markup

On June 27, 1984, the Subcommittee on Trade ordered H.R. 4887 favorably reported to the full Committee on Ways and Means by voice vote, with an amendment proposed by the Administration to more specifically define the magnetron tubes covered by the legislation. The effective date was also amended to 15 days after date of enactment.

SUMMARY OF TESTIMONY ON H.R. 4887

Administration

Department of Commerce: No objection to enactment of H.R. 4887 provided a more specific definition of magnetron tubes is made.

Statements for the Record

Supports

Magic Chef Inc.: There is no production of magnetron tubes in the United States. As a result, an additional financial burden exists due to the need to import the tubes.

Maytag Company: Reduce cost of importing tubes since there is no domestic production.

Association of Home Appliance Manufacturers: Reduce cost of importing tubes since there is no domestic production.

36-895 O 84

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