Any discussion of modernizing the United States’ trade enforcement toolkit must start with understanding the role of tariffs, given the centrality of tariffs to most trade enforcement actions. Not all tariffs support trade enforcement, and not all trade enforcement actions must involve tariffs—although most do. Tariffs have been used for centuries for different purposes. They can be used to help shield fledgling domestic producers from foreign competition—for example, what Alexander Hamilton called for in his famous “Report on the Subject of Manufactures.” Tariffs can also be used to compel a foreign government or foreign firm to change their ways, or they can be a source of revenue, as was historically the case in the United States. If a tariff is used to counteract the negative impact of subsidized or otherwise anti-competitive imports on U.S.-based producers, that action can be identified as “trade enforcement.”

In the United States, tariffs for the purposes of trade enforcement can be levied using several legal authorities. These include, among other authorities, Section 232 tariffs of the 1962 Trade Expansion Act, Section 201 and Section 301 of the 1974 Trade Act, and AD/CVD actions, which date to the 1930 Smoot-Hawley Act but were modified significantly by the Trade Agreements Act of 1979. Taken together, these authorities, with their different timelines, processes, and objectives, form the country’s trade enforcement toolkit.

Section 232 tariffs allow any federal department, agency head, or “interested party” to request that the U.S. Department of Commerce investigate the effects that specific imports have on U.S. national security; the Commerce Department may also self-initiate an investigation. This authority dates to the Trade Expansion Act of 1962 and allows the secretary of commerce, after consulting with the secretary of defense, other “appropriate officers of the United States,” and the public, if appropriate, to issue a report to the president advising on whether a specific product is being imported “in certain quantities or under such circumstances” to impair U.S. national security. If the Commerce Department determines that imports do impair U.S. national security, then the president, upon receipt of the report, has 90 days to 1) determine whether they concur with the Commerce Department’s findings, and 2) if so, determine the action, and the duration of the action, to be taken to address bodog online casino the national security threat.

Section 201 safeguards date to the 1974 Trade Act, which enables the president to provide temporary relief to a U.S. industry facing a surge of deleterious import competition by giving that industry time to make a “positive adjustment” that would enable it to compete more effectively in the future. Section 201 safeguards are enacted following an investigation by the U.S. International Trade Commission (USITC) into whether a particular industry is being seriously injured or threatened with serious injury, and, if so, whether an increase in imports is a “substantial cause” of that injury. If the USITC decides that an industry is being seriously injured or faces serious injury, then it makes recommendations to facilitate that industry’s positive adjustment to that competition. Recommendations may include the imposition of tariffs, a tariff-rate quota on the product, adjustment assistance, and/or trade negotiations to alleviate the injury or threat of injury. The president then must decide which, if any, of the USITC’s recommendations to implement. Import relief can last up to four years and be extended one or more times thereafter, but only up to a maximum of eight years.

Section 301 actions date to the same 1974 law and allow the administration to impose trade sanctions on foreign countries that violate U.S. trade agreements or engage in acts that are “unjustifiable” or “unreasonable” and burden U.S. commerce, defined to include goods, services, and investment. The U.S. trade representative (USTR) may initiate a Section 301 case after an investigation into the practices of a foreign government is requested by “any interested person” or after it “self-initiate[s]” its own investigation. A Section 301 committee is then formed to conduct public hearings, review evidence, and make recommendations regarding potential actions to remedy a foreign trade practice. Section 301 actions terminate automatically after four years, unless the USTR receives a request for continuation and conducts a review of the case.

AD/CVD is the most common trade enforcement action, the most current version of which dates to the Trade Agreements Act of 1979, but which first were introduced in an earlier version in the 1930 Tariff Act, commonly known as the Smoot-Hawley Act. They were designed to level the playing field for U.S. manufacturers by providing relief to industries that were “materially injured,” or threatened with injury, due to the sale of imported products at less than fair value, usually because the foreign producer benefits from subsidies from its home government. They were also designed to be “quasi-judicial” and removed from the fickle whims of political leadership. In most cases, AD/CVD actions begin following a petition to both the Commerce Department’s International Trade Administration (ITA) and the USITC, although it is possible for the ITA to self-initiate AD/CVD actions.

The ITA then assesses petitions, determines whether (and, if so, the amount of) dumping that has occurred, and if any illegal subsidies were provided to enable the dumping of product in the U.S. market. Concurrently, the USITC determines whether the U.S. industry in question has been “materially injured or is threatened with material injury.” If dumping has caused material injury, then the ITA determines the duty rate, usually assessed on a per-company basis, to offset the price difference between the imported good and a similar product produced in the United States.

A few additional tools are used less frequently but nonetheless are available to levy import tariffs in support of U.S. industry. Section 337 of the 1930 Tariff Act allows the USITC to investigate claims regarding intellectual property rights infringement, which can result in an exclusion order that directs U.S. Customs and Border Protection (CBP) officials to stop infringing imports from entering the United States. Section 338 of the same 1930 law allows the president to levy “new or additional duties” on imports from countries that have discriminated against U.S. commerce relative to the commerce of other countries.

In 2019, the Trump administration also threatened to raise tariffs in an effort to compel the Mexican government to limit the flow of migrants from Central America to the United States, citing the authority offered the president by the International Emergency Economic Powers Act (IEEPA) of 1979. IEEPA provides the president broad authority to regulate a variety of economic transactions that involve a foreign entity following a declaration of national emergency, but it is typically used in instances of economic sanctions, rather than to impose tariffs.

 

Each of these authorities dates to the 1960s or 1970s—and, despite modest updates through legislation and executive action, each has remained largely unchanged for nearly half a century. Herein lies the problem: The world has changed a lot since the presidencies of John F. Kennedy, Gerald Ford, and Jimmy Carter (the presidents who signed the authorities noted here into law), but the trade enforcement toolkit has not. This has placed American workers and American producers at a disadvantage, as the tools meant to protect them from the predatory trade practices of others have not kept pace with the modern economy.

Put simply, the lack of more modern trade enforcement authorities restricts policymakers to waging a modern, 21st-century great-power economic competition with the equivalent of Vietnam-era technology. And it hamstrings the government’s ability to safeguard the country’s vital interest, which unfettered globalization has put at risk. Sharper tools are needed to counter unfair trade practices in an era of both intense global competition and unprecedented global economic integration. This is particularly true in sectors where the United States, its partners, and its allies have a strategic interest in nurturing critical industries, avoiding harmful dependencies, and empowering workers. Several challenges, discussed below, deserve attention.

Trade enforcement tools move too slowly for the modern economy

An obvious problem with the existing toolkit is that it moves too slowly to meet the needs of highly bodog sportsbook review innovative sectors such as semiconductors, artificial intelligence (AI), or software development—sectors that will likely drive the global economy forward in the decades ahead.

The slowness of the trade enforcement tools is a function of many factors, meaning the solution is nuanced and varied. The statutory procedures associated with the different trade enforcement authorities are cumbersome and lengthy, often taking several months to complete. But in some high-tech sectors, even a few months of damaging market losses can severely weaken a domestic industry—and a few years of sustained losses can lead to permanent destruction.

Across almost all industries today, manufacturing can be scaled quicker and products distributed faster than when the United States’ trade enforcement tools were created. The solar industry provides a useful example. Despite U.S. national labs inventing most of the solar technologies deployed around the world, the United States produces only about 2 percent of the world’s solar panels—and that is with AD/CVD duties on Chinese-made solar panels in place since 2011 and Section 201 safeguards on solar imports since 2018.

The reality is that China’s willingness to weaponize its productive capacity, and its overcapacity in key sectors, is aided by the fact that the United States’ trade tools are not equipped to respond fast enough to counter its aggressive actions. As a result, China has been able to use export subsidies and other nonmarket practices to take advantage of the mobility and openness of the global trading system to maintain and even grow its market dominance, particularly in sectors such as steel, solar power, and electric vehicles, where the Chinese government has a strategic interest in controlling global supply chains.

And it has often done so despite the trade enforcement efforts of the United States, because in many instances, by the time the United States’ trade tools took effect, the damage was already done. Chinese firms had already gained significant market share, and, in some cases, U.S. producers (and producers in other market-based trading partners) were forced permanently out of the market. The delay in responding allowed China to reach economies of scale that U.S. producers simply could not compete with on level terms. Indeed, this strategy has been so successful for China that similar attempts by Chinese firms to capture market share in other strategic sectors will likely find similar success, unless the United States can effectively modernize its trade remedy tools.

In addition to the time associated with reviewing requests for trade remedy support, both AD/CVD and Section 201 actions primarily offer protection only when petitioners demonstrate damage or injury—which itself adds more time to the process. One could argue that this is the economic equivalent of making a patient bleed on the hospital floor before agreeing to help them. It is also deeply discordant with the modern economy. In most supply chains, purchasing contracts are frequently signed well in advance of delivery. As a result, by the time AD/CVD or Section 201 safeguards are adjudicated and take effect, supply chains have often hardened, making it difficult for domestic producers to regain lost market share and empowering import constituencies to cry foul about uncertainty and market disruptions.

Trade enforcement tools were created at a time when domestic alternatives existed

In 1979, when the modern version of AD/CVD authorities were established, the U.S. economy accounted for more than one-quarter of the world’s economy, and its manufacturers produced nearly seven times as much product as those in China. If the U.S. government responded to an AD/CVD petition with duties on imports, there were likely several domestic suppliers that both stood to benefit and could meet an increase in demand.

Today, the economic landscape is far different. U.S. manufacturers accounted for just 15 percent of global output in 2023. And, in many industries, there is a significant amount of concentration, with just a few remaining U.S. producers. A domestic manufacturer, for example, that competes only in the United States by selling to clients that have unique technology requirements is often unprepared, or even unable, to scale quickly enough to meet the demands of a broader market, even if a trade remedy action offers them that opportunity.

Building new factories or even a new production line is also expensive and typically requires financing, particularly for small- and medium-sized manufacturers. Scaling to meet expected demand increases thus requires a belief in the long-term viability of an industry or customer base—on behalf of both the manufacturer itself and the bank or financial institution that could finance its expansion. Yet the long-term viability of demand is called into question by the very need for AD/CVD protection.

Somewhat paradoxically, industry concentration has made this situation worse. If, for example, the new market opportunity created by trade remedy support were filled by 10 domestic suppliers, each company could roughly expect to capture 10 percent of the new demand. Much of this additional demand could likely be met by each firm increasing its utilization rate at its existing facilities. If, on the other hand, only one domestic company existed in the market, that company might expect to capture 100 percent of the new opportunity, although some of the market gap would likely be filled by imports from elsewhere.

This could be a potentially lucrative prospect for the company, but such a large increase in demand would almost certainly necessitate a much larger build-out of its productive capacity. In some cases, the firm might require financing to double or even triple its manufacturing capacity—a rate of growth that can be difficult for firms to achieve quickly. What is more, if this type of expansion requires a large loan, that usually comes with higher costs for the borrower (in this case, the manufacturer), which now must carry a heavier debt burden than may be advisable in a market defined by tariff uncertainty and predatory trade practices.

This suggests that if policymakers want domestic producers to scale up in order to both meet expected demand created by a trade enforcement action and fend off future competition from subsidized imports, then simply relying on traditional means of financing a firm’s expansion may be unwise. Instead, it may be necessary for the government to play a more active role in helping domestic producers faced with predatory import competition to scale, modernize, or both.

Trade enforcement does not align with industrial policy

One of the great frustrations for policymakers is that the existing trade enforcement toolkit operates roughly of its own volition rather than as a meaningful part of a larger strategy to build U.S. industrial competitiveness. Thus, coordination with industry that could have helped align trade enforcement support with the country’s strategic ambitions never happened.

In the solar industry, AD/CVD duties on Chinese solar panels would have been more effective if they were administered alongside a plan to retool, rebuild, and reenergize solar manufacturing in the United States. Instead, the lack of federal investment in the decade before the Inflation Reduction Act (IRA), and a market characterized by dramatically falling prices, meant that U.S. industry continued to lose market share, even with AD/CVD duties in place to protect them. The Biden administration’s investments through the IRA demonstrate that this sort of alignment is possible, but the passage of the IRA and the administration’s decisions on solar tariffs—through AD/CVD orders, Section 201 safeguards, and Section 301 tariffs—all occurred concurrently rather than as a cohesive national strategy.

This sort of industrial policy coupled with managed trade may seem radical to those schooled in the neoliberal tradition, but it is far from uncommon. As the Congressional Research Service recently wrote, “Few, if any, nations completely practice free trade.” Most intervene in their domestic market to varying degrees by providing subsidies to support manufacturing or by restricting imports. In fact, when competing against a long-term, strategic, nonmarket rival—as the United States is with China—a proactive strategy to build and maintain productive capacity at a level supportive of U.S. economic and national security will almost certainly require this sort of approach.

Trade enforcement is not designed to make U.S. production more competitive

As a corollary, trade enforcement is simply not designed to increase the competitiveness of U.S. manufacturing. It assumes, on the contrary, that U.S.-based producers require only a level playing field, as measured by price parity, to win in the domestic market.

This is because trade enforcement actions are not meant to fix structural problems that make U.S. manufacturers uncompetitive or vulnerable to import competition—subsidized or not. In fact, the revenue collected by CBP through various trade enforcement actions is deposited into the U.S. Treasury. It is not invested in a systematic or strategic way to increase the capacity of U.S. manufacturers, enhance productivity, or otherwise improve their ability to compete. None of it is used to retrain workers or provide a long-term comparative advantage that would enable U.S. producers to expand and grow into the future.

Too often, this means that industries in need of trade enforcement protection become addicted to it, unable to reorient themselves to compete going forward without the federal investment required to make future trade enforcement unnecessary. Trade remedy protection also does not require anything of the companies that request it: It does not require them to expand or modernize their factories, hire workers, pay a fair wage, train their employees, or do anything else that would place an industry in a more competitive position going forward.

Trade enforcement tools are not designed for integrated global supply chains

The trade enforcement tools available to the U.S. government today are constructed based on a simplistic bilateral view of trade; that is, a product made in one country is entirely of that country. This is absurd. Given the global market’s emphasis on comparative advantage and specialization, almost all traded products now contain parts or materials made in supply chains that include dozens of different countries.

The semiconductor industry provides a great example. There remains significant concern regarding China’s willingness to subsidize its legacy chip manufacturers and then flood the U.S. and other global markets with such low-cost chips that domestic production becomes nonviable. One solution would be for the United States to use its trade enforcement toolkit to place tariffs or duties on Chinese-made legacy chips. Several different authorities could be used for this purpose. China’s intent to dump legacy chips in the U.S. market is well-known (allowing AD/CVD duties); there would be a surge of import competition (suggesting potential Section 201 safeguards); and there is clearly a national security concern (allowing for potential Section 232 tariffs). But most legacy chips are imported not as chips themselves, but rather as a component part in a finished good.

Thus, the United States could not tariff legacy chips from China without needing to tariff all the electronic products that utilize legacy chips, many of which are produced in factories outside China and many of which support manufacturing in the United States. A similar situation exists in the electric vehicle industry, where there is growing concern that Chinese producers will build factories in Mexico and use United States-Mexico-Canada Agreement rules to import into the United States either tariff-free or with a small tariff, rather than face the much higher tariff rates announced as a result of the Biden administration’s Section 301 review.

This highlights a further bodog sportsbook review challenge: The existing trade enforcement toolkit is often unable to consider the impact of trade protection on downstream industries. The law prohibits officials reviewing AD/CVD petitions from even considering the impact on consumers or other downstream industries. And, when there are downstream impacts, the tools simply do not exist to lessen short-term economic disruptions or support an industry’s efforts to more speedily claw back lost market share.

Even if a single, small, or relatively uncompetitive U.S. manufacturer files an AD/CVD petition, and it is not opposed by 50 percent of the industry, the procedures outlined in the Commerce Department’s AD/CVD authorities are the same. If a foreign firm receives subsidies that allow it to sell into the U.S. market below fair market value, duties are applied to make imports from that country more expensive. This is the case regardless of whether the firm requesting trade enforcement protection can scale its production to meet higher domestic demand.

Certainly, supporting domestic industries in the face of predatory or subsidized imports, particularly when those practices have already resulted in calculable damages, often requires some short-term pain. But it is counterintuitive that the government cannot even consider how long it would take the firm requesting trade remedy protection to recapture lost market share—and what steps it could take to make the transition easier, faster, and less disruptive to consumers and the country’s broader industrial base.

A 2021 AD/CVD investigation into the dumping of chassis into the U.S. market by Chinese firm China International Marine Containers (CIMC) provides a good example. CIMC is the world’s largest chassis manufacturer. The Commerce Department’s investigation resulted in a duty rate of more than 220 percent: a 177.05 percent antidumping duty and a 44.32 percent countervailing duty. Yet the five American chassis manufacturers that requested AD/CVD protection admittedly were not ready to meet the dramatic increase in demand that could be expected from a drop-off in imports from CIMC. The result was a steep increase in chassis prices precisely at a time when supply chain bottlenecks were already raising prices for consumers across a range of other products. Could the tariffs have been announced but delayed, allowing industry the time necessary to scale its capacity? Could AD/CVD protection have been contingent on an investment plan from U.S. chassis manufacturers to ensure their ability to meet domestic demand once the tariffs were imposed? Could the U.S. government have provided seed funding to build out chassis production capacity to speed this transition?

AD/CVD has no national interest determination

The chassis case further demonstrates another challenge with the United States’ trade enforcement toolkit: Its most used trade enforcement authority, AD/CVD, lacks a national or public interest determination. It does not have to be this way. In Europe, policymakers can determine whether dumping has occurred, whether that dumping has caused damage to domestic manufacturers, and whether those damages justify tariff protections. In most cases, tariff protections are justified, but for certain goods, they might not be. In 2006, when Europe faced a flood of imports of cheap Chinese-made shoes, it was able to calibrate its trade enforcement measure in a far more targeted manner than the United States, determining that children’s shoes should be excluded from any tariff to ensure that their prices remain low.

A mechanism that would acknowledge the negative impact of predatory imports on a domestic industry and yet still allow duty-free importation of those products would be controversial—and ripe for political manipulation. Yet there could be cases where a tariff-based remedy is not the right response, particularly in industries where predatory imports take advantage of an existing market failure rather than causing it. In this situation, a different, alternative remedy might be more desirable and could better serve the national interest ,while limiting negative downstream impacts on consumers and other industrial sectors.

Trade enforcement is based exclusively on price

The existing trade enforcement toolkit is designed entirely around the idea that price is the determining factor in consumers’ choice. This is often far too simplistic in today’s high-tech economy. It is increasingly the case that access to data is a driving force in differentiating one company’s product, and its capabilities, from another. In this situation, price parity may be irrelevant, as giving away the product for free in order to capture the valuable data on consumer behavior that comes with its use may be more profitable. Would raising the cost of a Chinese-made product to that of a domestic alternative be wise if such action still afforded the Chinese firm access to the data of millions of American consumers? And what if those data then allow for the product to learn faster and eventually enjoy capabilities that the U.S.-made product cannot match, as could be the case with AI-powered products of the future?

Trade enforcement does not promote U.S. values and cannot value inaction

Related to the idea that the U.S. government’s trade enforcement toolkit is based solely on price is the fact that it is too often unable to adequately account for—and address—­situations where important values are at stake. If a country lacks environmental regulations or has weak worker health and safety requirements, isn’t that a form of subsidy in that it allows for cheaper production? If a country has lax climate targets or fails to push its manufacturers to decarbonize, that should be considered a subsidy to be addressed by U.S. AD/CVD action. The same is true about manufacturing destinations with lower wages, recognizing that prevailing wages in different markets are notoriously difficult to equate given differences in cost of living.

The Commerce Department’s AD/CVD investigations are designed to uncover and value the subsidies offered by a foreign firm’s home government that allows it to dump product in the U.S. market. But what if the lack of something is providing the space for foreign producers to manufacture at a cost below what is possible in the United States?

During Jair Bolsonaro’s presidency in Brazil, for example, deforestation rates skyrocketed, as his administration greatly favored the interests of agribusiness over Indigenous rights and the environment. Cattle ranging accounted for 80 percent of this deforestation. Could the United States have used its existing trade enforcement toolkit to levy tariffs on Brazilian beef either through AD/CVD, since allowing cattle rangers to use this land may be viewed as a subsidy, or through Section 301 tariffs, designed to compel Brazil to stop clearing so many hectares of forest? Such actions may have had an important effect, given that Brazil is the world’s largest beef exporter and the United States its second-largest export destination.

Trade enforcement is hard to align with others

The latter is a good example, too, of the challenge associated with aligning trade enforcement actions with other international partners, often limiting their impact. In the case of potential tariffs on Brazilian beef, tariff pressure would likely have only been effective if restrictions on Brazilian exports were coordinated closely with others—in this case, China, since it is by far the largest buyer of Brazilian beef. Chinese steel is another example. China has found willing buyers for its subsidized, and thus overly cheap, steel in Southeast Asia, the Middle East, and Africa—locations where U.S. steel producers have long stopped being competitive suppliers. To stop China from dumping its steel in the world market, the United States would need to coordinate trade enforcement actions with these markets, along with Korea, Japan, Europe, Canada, and other major consumers of steel.

 

In recent years, some in Congress have sought to make tweaks to AD/CVD authorities. The bipartisan Leveling the Playing Field 2.0 Act, introduced by Sens. Sherrod Brown (D-OH) and Todd Young (R-IN)—an update to the Leveling the Playing Field Act that was passed into law in 2015—would, for example, establish the new concept of “successive investigations,” providing the Commerce Department an ability to address repeat offenders in a faster manner; it would also allow AD/CVD duties on entities that receive Chinese government subsidies but operate in a third-country market. In addition, the Commerce Department recently updated its regulations and procedures related to AD/CVD cases, codifying the idea that noncollection of fees, fines, and other penalties is subject to countervailable duties.

The Leveling the Playing Field 2.0 Act and the recent Commerce Department rulemaking are both admirable, but other, more significant updates should be considered as well.

Options for Congress

Extend AD/CVD duties to products that include materials or component parts subject to existing AD/CVD orders

Given the world’s highly integrated supply chains, most imported products are not wholly manufactured in their market of embarkation; rather, most include materials or component parts produced in multiple places before final assembly and shipment to the United States. Congress should consider authorizing CBP officials to assess AD/CVD duties on finished goods that are known to include component parts subject to existing AD/CVD orders, regardless of whether the imported good is itself subject to a trade remedy action. This would ensure that shipments of finished goods are not vehicles for the duty-free import of products that would otherwise be subject to duties. It would also greatly enhance the value of AD/CVD actions for American manufacturers and their workers, particularly in upstream industries.

This calls to mind the 19th-century doctrine of “continuous voyage,” which justified the seizure of ships and their cargo destined for neutral ports if the cargo was thought to ultimately be destined for an enemy combatant. Today, however, instead of considering the final consumer of the shipment, CBP officials should consider the supply chain inputs that went into a product before shipment to the United States. Such a practice would, for instance, be helpful in addressing the potential for China to dump legacy semiconductors in the U.S. market through the export of cheap consumer goods. It would also ensure that actions taken to alleviate the import pressure from China’s steel and aluminum overcapacity would be more robust, as products using Chinese steel would be subject to the same AD/CVD actions as a shipment of steel directly from China.

Section 307 of the Tariff Act of 1930 already prohibits the importation of any product that was mined, produced, or manufactured wholly or in part using forced labor, meaning that CBP officials have experience parsing the supply chains of imported goods. The Commerce Department is likewise empowered to extend AD/CVD duties to imports deemed to have circumvented existing AD/CVD orders by transshipping through a third-country port—or by whether the product was deemed to have been only minimally modified before being shipped to the United States—indicating that the law already envisions some appreciation for how goods are moved in the global economy.

Applying AD/CVD orders to finished goods that would otherwise enter the country duty-free, but which include inputs subject to AD/CVD orders would require the Commerce Department to help CBP officials target shipments through the sharing of supply chain expertise. Both the Commerce Department and the Department of Homeland Security have developed new supply chain offices and are quickly developing the level of expertise needed for such a task. But in both cases, additional funding from Congress would support this capability and ensure that targeting is accurate and strategic.

Expand Section 232 authorities to enable tariff protection for industries where imports pose an economic security concern

Section 232 authority allows the president to take action to address bodog online casino the national security concerns raised by imports of certain products. Congress should consider expanding this authority to include the economic security concerns. Such a change would still require an investigation led by the secretary of commerce, in consultation with other parts of the U.S. government, thereby ensuring a transparent statement of why such actions are necessary. Given the interconnected nature of trade in today’s economy, the secretary of commerce’s recommendations should include efforts to minimize deleterious impacts on supply chains, particularly in the economies of key trading partners.

If the United States is serious about rebuilding its industrial sector around key, strategic goods, then a modified Section 232 authority would provide extra safeguards against predatory trade practices that could affect sectors of national significance. Sectors such as semiconductors, advanced batteries, electric vehicles, and quantum computing would be prime candidates to utilize an expanded Section 232 authority.

Given the delicate nature of economic security-based tariff protection, Congress could include in its amendment of the statute a requirement that any executive action to increase or decrease tariffs based on economic security concerns withstand a 30-day congressional review period. It may even make sense to consider tying increased tariff protection to a requisite investment in domestic manufacturing capacity—perhaps using the generated tariff revenue for this purpose).

Tie tariff protection to industry investment in competitiveness

Trade remedy protection can be a lifeline that keeps local factories operating, but without any requirement to invest in long-term competitiveness, that is rarely enough to hire back workers, modernize production processes, or take other steps that could alleviate the threat of subsidized import competition over the long term. In some situations, this is made more challenging, because the firms that benefit from trade enforcement actions are not equipped to scale at a rate necessary to meet domestic demand for their products. Trade enforcement petitions should thus require the petitioner to state clearly how trade protection will enable them to grow in the United States as well as the time needed to meet expected changes in demand. Note that Section 201 safeguard requests do require the petitioner to offer a plan for readjustment to import competition, but this is unenforceable and rarely survives for long even if safeguards are implemented.

Moreover, tariff protection should be contingent on the recipient firm or firms’ commitment to paying their workers a fair wage; commitment to expand and grow in domestic communities by hiring new workers, or hiring back previously laid-off workers; and commitment to train their workforce to better compete in the competitive job market of the future. This sort of conditionality is likely to raise eyebrows for those who believe trade remedies should address only the immediate price difference between subsidized imports and a domestically produced alternative. But it is a more fulsome response that recognizes that price parity does not, on its own, rehire workers, rebuild communities, or prepare firms to compete in the future.

If, for example, it is expected to take several years for an industry to increase U.S. production long enough to fulfill expected orders—as was the case with chassis manufacturers in 2021—then the law ought to allow for a delay in the imposition of duties for a period of time necessary to minimize any harmful impacts on downstream industries and consumers. In the case of AD/CVD duties, it may be beneficial to change the annual adjustment of duties based on a combination of the domestic industry’s recovery and the actual amount of dumping or subsidization—rather than only considering changes in the level of subsidies provided to a foreign firm.

Develop a new trade authority that enables tariffs in critical sectors to manage trade with nonmarket economies without having to demonstrate injury or the threat of injury

Congress should create a new trade policy authority that enables the president to proactively manage trade in specific, critical sectors between the United States and its nonmarket competitors without the need to prove injury or potential injury. There are parts of the U.S.-China trade relationship, for example, that need to be controlled in a way that supports American economic security and derisks supply chains. Sectors such as AI, quantum computing, biotech, and semiconductors are so critical to the future that it behooves the administration to act proactively to ensure enduring American leadership. Such new authorities should include provisions that allow Congress to limit the president’s actions or provide it the ability to reverse course.

Enable the president to provide alternative remedies when AD/CVD duties are deemed harmful to the national interest

It is wise to have civil servants review nothing but facts and to remain removed from political pressure when determining duty rates. Yet, in many instances, providing a trade enforcement benefit to one industry results in a cost being paid by others—consumers, alternative industries, or trading partners. Congress should thus afford the president the ability to override AD/CVD duties if they deem those duties to run counter to the national interest and instead offer an alternative remedy that achieves the same effect, while minimizing downstream impacts on the broader economy. Such an authority should be prescribed clearly in law with specific benchmarks and processes, including an opportunity for Congress to override the president’s decision within a set period of time.

Opportunities available for the Biden administration in current law

Use the Section 301 investigation into Chinese commercial shipbuilding requested by the United Steelworkers to demonstrate the viability of nontariff remedies

On March 12, 2024, the United Steelworkers (USW) and other labor organizations filed a Section 301 petition, requesting that the USTR open an investigation into Chinese commercial shipbuilding. The petition is highly innovative in that it does not request tariffs on Chinese-made ships, but rather suggests that fees be imposed on vessels built in China that dock at U.S. ports—and that the proceeds be used to establish a domestic shipbuilding industry revitalization fund. During a speech to the USW on April 17, President Joe Biden called on the USTR to accept the petition and begin an investigation. The administration should take the opportunity to use its Section 301 investigation to demonstrate the viability of using nontariff actions as an appropriate trade remedy, as well as of rebuilding a domestic industry’s capacity to produce an appropriate objective rather than viewing price parity between domestically produced goods and subsidized imports as the only goal.

Allow projections of damages and other evidence to be used in assessing the need for tariff protection rather than actual damages

In many fast-moving sectors, waiting to calculate the economic damages of unfair or illegal import competition means waiting too long to take any action that could meet the needs of domestic producers. The administration should allow an industry to file a petition for AD/CVD or Section 201 protection to use economic models or projections of damages, or other forms of evidence to demonstrate the threat of injury they face. Agencies would need to weigh the rigor of the projection as part of their findings, which could be challenging, but this is a better option than allowing an industry to wither before any protection can be offered.

Update rules that govern ‘standing’ to enable component part manufacturers to bring AD/CVD cases against finished products entering the U.S. market

If a finished good manufactured abroad is dumped in the U.S. market, it is likely that it includes minimal, and often zero, U.S. content. The product’s presence in the U.S. market thus “injures” both its direct competitor in the United States and that domestic firm’s entire supply chain. And since most U.S. manufacturers source some product from fellow U.S. manufacturers as part of their supply chains, the impact of dumping goes well beyond the direct U.S.-based competitor. These smaller supply chain firms ought to have the ability to petition the U.S. government for trade enforcement assistance in this scenario.

Develop a mechanism to coordinate trade enforcement action with trading partners

One of the key challenges of unilateral trade enforcement is that while one’s domestic market may be spared from dumped imports, those same dumped imports likely land in a different market once blocked from the United States. This ultimately hurts the United States’ ability to export in the affected sectors and hurts U.S. partners and allies, whose industries often feel the brunt of unfair import competition, usually without the same trade policy authorities available in the United States. What is needed is a mechanism to coordinate trade enforcement actions, perhaps using entities such as the U.S.-EU Trade and Technology Council or the Indo-Pacific Economic Framework for Prosperity to align trade enforcement actions whenever possible.

Use AD/CVD authorities to advance a pro-climate and pro-worker agenda

AD/CVD authorities have always been used when addressing subsidies provided to a foreign manufacturer by their home government. But it is equally true that often, support comes in the form of not requiring certain actions or looking the other way at a practice that would be unacceptable in other markets. The Biden administration ought to bring an AD/CVD case against products made in markets with lax labor, environmental, or climate laws, which by not requiring a foreign manufacturer to make necessary improvements to their practices allows them to produce at a cost below what would otherwise be the case.

Self-initiate a Section 232 review of the national security risk posed by carbon-intensive imports

The U.S. Department of Defense has long noted bodog online casino the national security implications of climate change, so the link between importing carbon-intensive products and national security ought to be obvious and well established. The Commerce Department should thus self-initiate a Section 232 investigation into the importation of carbon-intensive products in key industries. For example, if the Commerce Department reviewed the national security implications of imports of aluminum, cement, electricity, fertilizers, hydrogen, and iron and steel, the result could be duties that mirror those associated with the European Union’s carbon border adjustment or could provide the authority needed to expand the potential Global Arrangement on Sustainable Steel and Aluminum to other sectors, enabling the provision of market access in select sectors on the basis of carbon intensity.

Importantly, if the United States were to strengthen its trade remedy tools in the manner described in this report, it should expect and accept that its trading partners will follow suit. In a world defined by interconnected supply chains and intense geo-economic competition, such reciprocal actions taken by U.S. trading partners would be a net positive for the nation, as they would further isolate products produced illegally, or those unfairly subsidized to compete in the global market. And if the United States’ trading partners matched their updates to trade enforcement regimes with the scale of investment that the Biden administration has made in rebuilding the United States’ industrial base, it would go a long way toward speeding the transition to a cleaner, more resilient, and fairer trade system.

For the first time in several generations, the United States has begun to implement an industrial policy. The results have been impressive, with more than $860 billion of new private sector investment having flowed into American manufacturing—the effects of which will be felt for decades to come in the form of greater economic resilience and national security. But along with a broader commitment to industrial policy and a rethink of how trade bodog sportsbook review can support workers and the environment must come a modernization of how the United States uses its trade enforcement tools. Trade enforcement alone will not dramatically rebuild the U.S. industrial base. But when paired effectively with other trade policy measures, a strong, calibrated, and appropriate trade enforcement agenda can—and should—add another positive stimulant to the Biden administration’s reindustrialization agenda. This is why getting these issues right is so important.

To read the full report as it is published on the Center for American Progress’ website, click here.