H.R. 3575: Axing Nonmarket Tariff Evasion Act

This bill, known as the Axing Nonmarket Tariff Evasion Act, aims to amend the Trade Act of 1974 to allow the United States Trade Representative (USTR) to impose measures against certain entities that evade or may attempt to evade trade duties related to nonmarket economy countries. Here is a breakdown of what the bill entails:

Key Objectives

• Authorize the USTR to investigate and take action against entities that avoid tariffs by establishing or planning to establish investments in third countries.
• Provide a framework for imposing duties on goods produced in these third countries if they are found to be associated with evasion activities.

Investigation Process

• The USTR can initiate an inquiry if there are indications that a covered entity (essentially a company influenced by a nonmarket economy country) is attempting to evade tariffs.
• Inquiries can be self-initiated by the USTR or requested by interested parties, including Congress.
• If there is reasonable evidence after such a request, the USTR can begin an official inquiry.

Remedial Measures

• If the USTR determines that there is evasion concerning a covered entity, they can impose remedial measures. These could include duties that are equivalent to the original tariffs associated with the nonmarket economy country.
• These measures can be applied both retrospectively (if production has started in the third country) and prospectively for planned production.
• Should the USTR decide to take action, they must report to Congress if they choose not to impose a duty, explaining the potential social and economic impacts of that decision.

Duration of Measures

The measures imposed would remain in effect as long as the related duties on the nonmarket economy country’s goods are active or as long as the country has interests in the third-country investment in question.

Definitions

• Covered entity: Refers to entities that are controlled by nonmarket economy countries, which can include investments where at least 25% ownership is held by such countries.
• Nonmarket economy country: Defined as countries that meet specific criteria, including being listed on the Special 301 Priority Watch List.
• Trade Representative: Refers to the U.S. Trade Representative, the official responsible for international trade negotiations and policies.

Relevant Companies

• None found