S. 4038 — Small Business Liberation 2.0 Act

This section defines 11 terms for purposes of the Act, including “Commission” (i.e., Federal Trade Commission), “covered duty” (i.e., a duty imposed under emergency authority in section 122 of the Trade Act of 1974), “covered good,” “duty-related shock date,” “planned duty,” “small business concern” (i.e., as defined in 15 U.S.C. 632), and “ultimate parent entity.”

This section exempts goods imported by or for the use of a small business concern from covered duties under balance-of-payments authority. It further requires the President to refund any such duties already paid on those goods, not later than 90 days after enactment.

This section prohibits any person from selling or offering for sale in the United States a covered good (i.e., a good subject to duties under balance-of-payments authority) at an unreasonably high price during the 5-year period following the effective date or increase of such a duty or the announcement of a planned duty via written or spoken statement. An unreasonably high price occurs if the price of a final good or good including a component exceeds the direct costs from the duty plus additional costs demonstrating the duty was not a pretext for the increase, with baseline prices determined by the average price during the preceding 180 days. This section exempts small business concerns from the prohibition; creates a rebuttable presumption of violation on any duty-related shock date if a person with unfair leverage (generally, non-small businesses or those with other Commission-defined characteristics) sells or offers the good above the prior 180-day average price; and allows rebuttal by clear and convincing evidence attributing the full increase to qualifying costs. This section directs the Federal Trade Commission (FTC) to promulgate implementing regulations under APA notice-and-comment procedures (5 USC 553), after consulting specified agencies; treats violations (including of regulations) as violations of an FTC rule under 15 USC 57a(a)(1)(B) defining unfair or deceptive acts or practices; and authorizes FTC enforcement with all powers, penalties, privileges, and immunities under the FTC Act (15 USC 41 et seq.).

This section requires the U.S. International Trade Commission (USITC) and Bureau of Labor Statistics (BLS), not later than one year after enactment and annually thereafter, to jointly submit to Congress and make publicly available a report on prices of goods sold by non-small business entities, focusing on changes in prices of covered goods—with BLS first assessing whether existing surveys provide sufficiently granular data on pricing decisions and consumer prices and, if not, developing new survey questions. This section further requires the Federal Trade Commission (FTC), on the same schedule, to submit to Congress and make publicly available a report on its enforcement activities under the Act, including an assessment of the impact on consumer prices for both covered goods and all goods.