HR4978-119

What This Bill Does

The Secure Trade Act imposes a new 10 percent ad valorem duty on imports of any good into the United States for each calendar year beginning after enactment. That duty is in addition to existing duties. The President may reduce the percentage for goods in a U.S. economic sector, but not to zero, only after determining that the reduction is in the national interest or national security interest and consulting the House Ways and Means Committee and Senate Finance Committee.

The bill also requires the President to revise the Harmonized Tariff Schedule for articles of the People's Republic of China. Most Chinese articles with rates below 35 percent would be raised to 35 percent ad valorem, while specified articles tied to critical supply chains, section 301 investigations, section 232 investigations, or Commerce-designated dual-use items would be raised to 100 percent ad valorem if their rates are lower. The President may phase in certain rates, create quotas to reduce reliance on Chinese articles, waive duties for limited national-security periods, and prohibit imports of Chinese articles that threaten national security or involve unfair trade practices or human rights violations.

Who Benefits and How

U.S. manufacturers competing with imports benefit because broad tariffs and higher China-specific rates raise the cost of imported substitutes. Domestic critical supply chain manufacturers benefit because goods on Commerce critical supply chain lists, section 301 investigations, section 232 investigations, or dual-use determinations receive the highest tariff floor. Federal customs revenue accounts benefit from additional duties. National security trade policymakers benefit from tools to reduce reliance on Chinese articles, block imports tied to national-security threats or abusive practices, and review foreign-country-of-concern factory investments.

Who Bears the Burden and How

U.S. importers bear higher duty payments on imports generally and much higher duty exposure on Chinese merchandise. Retailers, manufacturers using imported inputs, and U.S. consumers may face higher costs when import duties are passed through supply chains. PRC exporters bear reduced U.S. market access from higher rates, quotas, valuation rules, and possible import prohibitions. U.S. Customs and Border Protection and the U.S. International Trade Commission bear new valuation verification and determination duties for Chinese merchandise. CFIUS review staff bear additional mandatory-declaration and national-security review work for covered greenfield and brownfield investments by foreign countries of concern.

Key Provisions

• Imposes an additional 10 percent ad valorem duty on imports of any good into the United States.
• Authorizes sector-specific presidential reductions after national-interest or national-security findings and congressional committee consultation.
• Requires China-specific Harmonized Tariff Schedule rates, including a 35 percent floor for most Chinese articles and a 100 percent floor for specified critical, investigated, or dual-use articles.
• Authorizes China-related quotas, limited national-security waivers, and import prohibitions for threats, unfair trade practices, or human rights violations.
• Requires Chinese merchandise to be appraised using United States value and requires importers to submit U.S. value statements to CBP.
• Requires CBP to verify importer value statements and send accuracy determinations or revised values to the U.S. International Trade Commission.
• Defines specified articles using Commerce critical supply chain lists, section 301 investigations, section 232 investigations, and Commerce dual-use determinations.
• Expands CFIUS covered transactions to certain greenfield and brownfield real estate and factory investments controlled by foreign countries of concern.