Stopping Adversarial Tariff Evasion Act

Bill Number

S. 172

Origin Chamber

Senate

Congress

119th Congress, Session 1

Policy Area

Foreign Trade and International Finance

Status

Introduced

Latest Action

2025-01-21: Read twice and referred to the Committee on Finance.

Last Updated

2026-05-15T14:50:48Z

AI-Generated Summary

Purpose

The Stopping Adversarial Tariff Evasion Act aims to prevent foreign entities from evading U.S. trade restrictions, such as tariffs, by clarifying how the "country of origin" is determined for imported goods linked to nations considered U.S. adversaries. It ensures that trade enforcement actions treat goods produced or assembled by these adversaries—or entities they control—as originating from the adversary country itself, closing loopholes in existing trade laws.

Key Provisions

• Amendments to Trade Laws: The bill adds new subsections to three key U.S. trade statutes:
• Section 301(d) of the Trade Act of 1974 (19 U.S.C. 2411(d)), which authorizes the U.S. Trade Representative (USTR) to respond to unfair foreign trade practices.
• Section 203 of the Trade Act of 1974 (19 U.S.C. 2253), which allows the President to impose temporary import restrictions after investigations show serious injury to U.S. industries from imports.
• Section 232(c) of the Trade Expansion Act of 1962 (19 U.S.C. 1862(c)), which empowers the President to adjust imports for national security reasons.
• Country of Origin Rule: Under each amendment, any action (e.g., tariffs or quotas) taken against a "foreign adversary country" will also apply to articles (goods) that are produced, manufactured, or undergo final assembly by:
• A "foreign adversary party" (e.g., their government or related entities).
• An entity owned, controlled, directed, or operated by such a party.

These goods are treated as if they originated in the foreign adversary country, regardless of where final processing occurred.

• Definitions (identical across all amendments):
• Foreign Adversary Country: Includes China (People's Republic of), Russia, Iran, North Korea, Cuba, and Venezuela (only while Nicolás Maduro is president).
• Foreign Adversary Party: Covers the government of an adversary country (including its agencies and officials); entities organized under its laws or headquartered there; and entities deeply involved in China's industrial policies or "military-civil fusion" strategy (e.g., those receiving funding or subsidies from China for such purposes).
• Control: An entity is considered controlled if a foreign adversary party holds at least 25% of its equity interests (directly or indirectly) over the past 12 months. This includes stakes through joint ventures, co-investments, or financial instruments like derivatives that mimic ownership returns. "Control" draws from an existing federal regulation (31 C.F.R. § 800.208) defining influence over business decisions.
• Short Title: The act is named the "Stopping Adversarial Tariff Evasion Act."

Significant Changes to Existing Law

• Broadened Scope of Enforcement: Previously, country-of-origin rules for tariffs and trade actions focused on where goods were substantially transformed. This bill expands that to include indirect control (e.g., 25% ownership via investments), making it easier to target evasion tactics like routing goods through third countries or using shell companies.
• Specific Targeting of Adversaries: Introduces explicit lists of adversary countries and parties, which were not previously defined in these statutes. This applies retroactively to ongoing enforcement but ties definitions to the enactment date for regulatory consistency.
• No New Authorities Created: The bill clarifies and strengthens existing presidential and USTR powers under Sections 301, 203, and 232, rather than granting new ones. It does not alter investigation processes but ensures actions cover a wider range of linked imports.

Potential Impacts

• On Government Agencies: Enhances tools for the USTR and Department of Commerce to enforce trade remedies, potentially increasing administrative workload for tracking ownership (e.g., via equity disclosures). Could lead to more investigations into supply chains.
• On Citizens and Businesses: U.S. importers and companies reliant on goods from or linked to adversary countries may face higher tariffs or restrictions, raising costs for consumers (e.g., electronics, vehicles). Domestic industries (e.g., steel, tech) could benefit from reduced competition.
• On International Relations: May heighten trade tensions with listed countries, prompting retaliatory measures (e.g., tariffs on U.S. exports). Could affect global supply chains, encouraging diversification away from adversaries but risking disruptions in allied nations hosting controlled entities.

Main Stakeholders Affected

• U.S. Government: USTR, President, and agencies like Commerce and Treasury, who gain clearer enforcement guidelines.
• U.S. Businesses and Importers: Those importing or sourcing from adversary-linked entities, potentially facing compliance burdens and cost increases.
• Consumers: Everyday Americans, who may see higher prices for imported goods.
• Foreign Entities and Governments: Companies and state actors in China, Russia, Iran, North Korea, Cuba, and Venezuela (under Maduro), who could lose market access; also affects third-country firms with adversary investments.
• U.S. Industries: Sectors vulnerable to imports (e.g., manufacturing, agriculture) that seek protection from unfair practices.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens anti-evasion measures but could invite challenges under World Trade Organization (WTO) rules, which emphasize substantial transformation for origin determinations. The 25% control threshold provides a clear, defensible standard but may require court tests for indirect ownership cases.
• Constitutional: Aligns with broad executive authority over trade (Article II powers), as upheld in cases like United States v. Curtiss-Wright (1936), but risks scrutiny if applied broadly without due process for affected importers.
• Political: Targets specific geopolitical rivals, signaling a hardline U.S. stance on economic security. As a Senate-introduced bill (by Sen. Rick Scott, R-FL, on January 21, 2025), it reflects bipartisan concerns over supply chain risks but could polarize debates on free trade vs. protectionism. Referred to the Senate Finance Committee, its passage would depend on broader trade policy priorities.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Sen. Scott, Rick [R-FL]

Recent Actions

• 2025-01-21: Read twice and referred to the Committee on Finance.
• 2025-01-21: Introduced in Senate

Bill Versions

• Stopping Adversarial Tariff Evasion Act — issued 2025-01-21 — PDF (10 pages)