S. 172 — Stopping Adversarial Tariff Evasion Act

This section amends Section 301(d) of the Trade Act of 1974 to require that actions by the U.S. Trade Representative against a foreign adversary country—such as tariffs or other restrictions in response to unfair trade practices—apply to any article produced, manufactured, or undergoing final assembly by a foreign adversary party or an entity owned, controlled, directed, or operated by such a party, treating the article as originating in the foreign adversary country. (As background, Section 301 authorizes the Trade Representative to enforce U.S. rights under trade agreements and counter foreign acts, policies, or practices that are unjustifiable and burden U.S. commerce.) It defines foreign adversary countries as the People's Republic of China, Russia, Iran, North Korea, Cuba, and Venezuela (while Nicolás Maduro is president); foreign adversary party to include their governments, entities organized under or headquartered in those countries, and (for China) entities involved in its industrial policies or military-civil fusion strategy; and ownership or control to include direct or indirect equity interests of at least 25% (including through joint ventures or derivatives), with "control" per 31 CFR 800.208. (Thus, the provision targets tariff evasion or transshipment by adversary-controlled entities in third countries.)

This section requires any presidential action under this section—import relief such as tariffs or quotas following an affirmative serious injury determination by the U.S. International Trade Commission—to apply to articles produced, manufactured, or undergoing final assembly by a foreign adversary party or entity owned (including 25% equity interests), controlled, directed, or operated by such a party, treating the articles as originating in a foreign adversary country. Foreign adversary countries include the People's Republic of China, the Russian Federation, the Islamic Republic of Iran, the Democratic People's Republic of Korea, the Republic of Cuba, and the Bolivarian Republic of Venezuela during any period in which Nicolás Maduro is president. (Thus, such relief applies regardless of nominal country-of-origin marking for these adversaries' products.)

This section establishes new country-of-origin criteria under Section 232(c)(4) of the Trade Expansion Act of 1962, deeming any article produced, manufactured, or undergoing final assembly by a foreign adversary party—or an entity owned, controlled, directed, or operated by such a party (i.e., with at least 25% equity interests held directly or indirectly by one or more foreign adversary parties, including through co-investments, joint ventures, or derivatives)—as originating from a foreign adversary country for purposes of presidential enforcement actions under Section 232(c)(1). (As background, Section 232 authorizes the President to adjust imports, such as by imposing tariffs or quotas, upon a Commerce Department determination that they threaten national security.) Foreign adversary countries are defined to include the People's Republic of China, the Russian Federation, the Islamic Republic of Iran, the Democratic People's Republic of Korea, the Republic of Cuba, and the Bolivarian Republic of Venezuela (during any period when Nicolás Maduro is president); foreign adversary parties include their governments and related entities, plus China-linked entities involved in industrial policies or military-civil fusion strategies. Control is defined per 31 CFR 800.208 (as in effect on enactment of the Stopping Adversarial Tariff Evasion Act). (Thus, such articles are eligible for national security-based import restrictions regardless of nominal origin.)