S.172 - Stopping Adversarial Tariff Evasion Act (119th Congress)
Summary
S.172, the Stopping Adversarial Tariff Evasion Act, aims to clarify the country of origin for certain imported articles to strengthen trade enforcement actions against foreign adversaries. The bill amends the Trade Act of 1974 and the Trade Expansion Act of 1962 to ensure that goods produced, manufactured, or assembled by foreign adversary parties are treated as originating from the adversary country, regardless of where the final steps occur. This includes entities owned, controlled, or directed by a foreign adversary party, defined as those with at least 25% equity interest held by such parties.
Expected Effects
The bill will likely lead to stricter enforcement of tariffs and trade restrictions on goods from countries like China, Russia, Iran, North Korea, Cuba, and Venezuela. This could result in increased costs for some imported goods and potential shifts in global supply chains. The intended effect is to reduce the ability of these countries to evade tariffs by routing products through other nations.
Potential Benefits
- Enhanced National Security: By preventing tariff evasion, the bill strengthens national security by reducing economic dependence on adversarial nations.
- Protection of Domestic Industries: American businesses may benefit from reduced unfair competition from foreign adversaries.
- Fairer Trade Practices: The bill promotes fair trade by ensuring that tariffs are applied as intended, preventing circumvention.
- Discourages Unfair Practices: The bill discourages foreign adversaries from engaging in practices that harm U.S. interests.
- Strengthened Trade Enforcement: Provides clearer guidelines for determining the origin of goods, making enforcement more effective.
Most Benefited Areas:
Potential Disadvantages
- Increased Costs for Consumers: Tariffs could increase the price of imported goods, potentially impacting consumers.
- Potential for Retaliation: Adversary countries may retaliate with their own tariffs or trade restrictions, harming U.S. exports.
- Supply Chain Disruptions: Businesses may face disruptions as they adjust their supply chains to comply with the new regulations.
- Increased Administrative Burden: Determining the origin of goods and the involvement of foreign adversary parties could create an administrative burden for businesses and government agencies.
- Strained International Relations: The bill could strain relations with the targeted countries, potentially impacting diplomatic efforts.
Constitutional Alignment
The bill aligns with the constitutional power of Congress to regulate commerce with foreign nations (Article I, Section 8, Clause 3). It also relates to the President's authority in foreign affairs and national security. The definitions of 'foreign adversary country' and 'foreign adversary party' appear to be policy decisions within the purview of the legislative and executive branches.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).