H.R. 4978: Secure Trade Act

This bill, known as the Secure Trade Act, proposes several changes to the import duties on goods brought into the United States, particularly focusing on enhancing trade policies related to China. The main provisions of the bill include:

Imposition of Additional Duties

• The bill mandates a new duty of 10% on all goods imported into the U.S., starting from the year following the enactment of the Act.
• This 10% duty is in addition to any existing duties on imported goods.
• The President has the authority to reduce this duty on certain imports if deemed necessary for national interest, with Congressional consultation required before such decisions are made.

Trade with China

• The bill establishes specific rates of duty for goods imported from China, revising the Harmonized Tariff Schedule to reflect these new rates.
• For certain non-strategic goods, if the duty rate is below 35% when the bill is enacted, it will be increased to 35%.
• In cases where specific articles imported from China have an existing rate below 100%, the bill mandates increasing that rate to 100%.
• The bill also allows for annual adjustments of duties based on inflation, calculated against the Consumer Price Index.

Phased Implementation of Duty Increases

• The bill outlines a phase-in schedule for the new duty increases, applying 10% of the increase after 180 days post-enactment, 25% after 2 years, 50% after 4 years, and 100% after 5 years.

Tariff-Rate Quotas and Quota Adjustments

• The President can establish tariff-rate quotas specifically for articles imported solely from China, adjusting these quotas annually based on U.S. consumption versus production.
• Once a tariff-rate quota has been reached for a calendar year, any additional imports will face a 100% duty rate.

Valuation of Goods

• Imported goods from China must be appraised at their United States market value, with importers required to submit valuation statements to U.S. Customs and Border Protection.
• U.S. Customs will verify these valuations to ensure accuracy.

National Security Provisions

• The bill grants the President the authority to prohibit certain imports from China if they are deemed a threat to national security or involve unfair trade practices.
• Additionally, the bill includes provisions for reviewing foreign investments in U.S. companies to address potential national security risks.

Additional Authorities

• The President may establish further modifications to duties and impose quotas to decrease reliance on Chinese imports.

Relevant Companies

• AAPL (Apple Inc.): Could be impacted due to dependency on Chinese manufacturing for various products.
• GOOGL (Alphabet Inc.): Potentially affected due to supply chain and product components sourced from China.
• TSLA (Tesla, Inc.): Likely to experience effects related to tariffs on automotive components sourced from China.
• NKE (Nike, Inc.): Could be affected by increased costs on footwear and apparel manufactured in China.
• AMZN (Amazon.com, Inc.): Possible impacts related to increased shipping costs from Chinese suppliers.