The "Stopping Adversarial Tariff Evasion Act" clarifies and strengthens how U.S. trade laws are applied to goods produced by foreign adversaries, ensuring that tariffs and other trade restrictions cannot be circumvented by entities connected to these countries. This bill targets countries like China and Russia, and companies associated with them, to prevent tariff evasion and safeguard U.S. trade interests and national security.
Rick Scott
Senator
FL
The Stopping Adversarial Tariff Evasion Act clarifies how trade restrictions apply to countries considered foreign adversaries, ensuring that goods produced, manufactured, or assembled by entities connected to these adversaries are treated as if they originated in the adversary country itself. This applies to trade enforcement actions, import injury determinations, and actions to safeguard national security. The bill defines "foreign adversary country" and "foreign adversary party" to include governments, entities, and those involved in specific industrial or military strategies. This aims to prevent tariff evasion by foreign adversaries through production or assembly in other countries.
New Bill Targets Goods from China and Other 'Adversaries,' Even if Assembled Elsewhere: Broad Powers for Trade Rep and President
The "Stopping Adversarial Tariff Evasion Act" aims to crack down on goods coming from countries the U.S. considers adversaries, even if those goods are only partially made or assembled there. This isn't just about stuff stamped "Made in China"—it's about any product with connections to China, Russia, Iran, North Korea, Cuba, and Venezuela (under Maduro). (SEC. 2, 3, 4)
Tightening the Screws on Trade
The bill gives the U.S. Trade Representative and the President broad authority to slap tariffs or other trade restrictions on goods linked to these countries. It does this by significantly expanding what counts as "originating" from an adversary. If a company in, say, Vietnam, is at least 25% owned by a Chinese entity, goods they assemble could be treated as if they were entirely made in China. (SEC. 2, 3, 4)
This 25% ownership rule applies broadly, covering everything from direct investment to joint ventures and even "derivative financial instruments." (SEC. 2, 3, 4). The term "control" is defined as it is in section 800.208 of title 31, Code of Federal Regulations. And it's not just about government ownership—any entity "substantively involved" in China's industrial policies or military-civil fusion strategy is also targeted. What does "substantively involved" actually mean? The bill doesn't provide clear examples, leaving it open to interpretation. (SEC. 2, 3, 4)
Real-World Ripple Effects
Imagine a U.S. company that sources parts from a factory in Mexico. If that factory has significant investment from a Chinese firm (25% or more), those parts—and any finished product they go into—could suddenly face tariffs as if they came directly from China. This could impact a wide range of industries, from electronics and apparel to auto parts. Companies with complex supply chains involving these countries could face higher costs and disruptions. (SEC. 2, 3, 4)
The Big Picture: More Power, More Tension?
This bill significantly expands the government's power to impose trade restrictions based on national security and perceived unfair trade practices. (SEC. 2, 3, 4) While it aims to protect American industries, it could also lead to higher prices for consumers and further strain relationships with countries like China. The broad definitions and wide discretion given to the Trade Representative and President raise concerns about potential overreach. The lack of clear guidelines on what constitutes "substantive involvement" in China's industrial policies could create uncertainty for businesses. (SEC. 2, 3, 4)