Duty-free entry of supplies procured by Department of Defense

(a) Issuance of duty-free entry certificates (1) In general Except as provided by paragraph (2), the Secretary of Defense shall issue a duty-free entry certificate for any of the following supplies imported pursuant to a procurement contract entered into by the Department of Defense: (A) An end product or component imported from a country with which the United States has a memorandum of understanding for reciprocal procurement of defense items in effect under section 4851 of title 10, United States Code. (B) A defense item that is an eligible product as defined in section 308 of the Trade Agreements Act of 1979 (19 U.S.C. 2518). (2) Exceptions Paragraph (1) does not apply with respect to a product or component described in that paragraph if— (A) the product or component is eligible for duty-free treatment under the column 1 special rate of duty column of the Harmonized Tariff Schedule of the United States; or (B) the product or component has already entered the customs territory of the United States and the contractor already has paid the duty with respect to the product or component. (b) Tracking of supply chain The Secretary shall— (1) track the impact of economic fluctuations, include tariffs, supply chain disruptions and inflation, on all major prime contracts entered into by the Department of Defense; and (2) not later than January 30, 2026, submit to the congressional defense committees a report that includes— (A) an assessment of cost increases to both the Department and contractors as a result of tariffs imposed under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) and section 232 of the Trade Expansion Act of 1962 (19 U.S.C. 1862); (B) an assessment of the effects of such tariffs on supply chains and lead times for major defense platforms; and (C) a summary of agreements entered into under section 4851 of title 10, United States Code, and an assessment of the application of those agreements to the defense supply chain. (c) Report on duty-free entry certificates Not later than January 30, 2026, and annually thereafter until January 30, 2030, the Secretary, acting through the Director of the Defense Contract Management Agency, shall submit to the congressional defense committees a report on articles classified under subheading 9808.00.30 of the Harmonized Tariff Schedule of the United States that includes— (1) a summary of such articles for which the Secretary issued a duty-free entry certificate; and (2) a summary of such articles for which a duty-free entry certificate was requested and denied.

(a) Issuance of duty-free entry certificates (1) In general Except as provided by paragraph (2), the Secretary of Defense shall issue a duty-free entry certificate for any of the following supplies imported pursuant to a procurement contract entered into by the Department of Defense: (A) An end product or component imported from a country with which the United States has a memorandum of understanding for reciprocal procurement of defense items in effect under section 4851 of title 10, United States Code. (B) A defense item that is an eligible product as defined in section 308 of the Trade Agreements Act of 1979 (19 U.S.C. 2518). (2) Exceptions Paragraph (1) does not apply with respect to a product or component described in that paragraph if— (A) the product or component is eligible for duty-free treatment under the column 1 special rate of duty column of the Harmonized Tariff Schedule of the United States; or (B) the product or component has already entered the customs territory of the United States and the contractor already has paid the duty with respect to the product or component. (b) Tracking of supply chain The Secretary shall— (1) track the impact of economic fluctuations, include tariffs, supply chain disruptions and inflation, on all major prime contracts entered into by the Department of Defense; and (2) not later than January 30, 2026, submit to the congressional defense committees a report that includes— (A) an assessment of cost increases to both the Department and contractors as a result of tariffs imposed under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) and section 232 of the Trade Expansion Act of 1962 (19 U.S.C. 1862); (B) an assessment of the effects of such tariffs on supply chains and lead times for major defense platforms; and (C) a summary of agreements entered into under section 4851 of title 10, United States Code, and an assessment of the application of those agreements to the defense supply chain. (c) Report on duty-free entry certificates Not later than January 30, 2026, and annually thereafter until January 30, 2030, the Secretary, acting through the Director of the Defense Contract Management Agency, shall submit to the congressional defense committees a report on articles classified under subheading 9808.00.30 of the Harmonized Tariff Schedule of the United States that includes— (1) a summary of such articles for which the Secretary issued a duty-free entry certificate; and (2) a summary of such articles for which a duty-free entry certificate was requested and denied.