H.R. 735: United States Reciprocal Trade Act

This bill, known as the United States Reciprocal Trade Act, aims to address issues related to international trade by giving the President the authority to impose tariffs on imports from foreign countries if those countries have significantly higher tariffs or non-tariff barriers against U.S. goods. Here is a breakdown of the key components of the bill:

Findings

The bill includes several findings that highlight the current situation of trade for the United States:

• The U.S. has a relatively open market with low tariffs but faces higher tariffs from various trading partners.
• Many trading partners impose higher tariffs on U.S. goods than the U.S. imposes on theirs.
• The bill points out issues such as high tariffs on U.S. automotive products by European countries and the importation of cheap goods from Canada and Mexico, which it argues negatively impacts American markets.
• There is a perceived lack of reciprocity in tariff levels which leads to a growing trade deficit and puts U.S. businesses at a disadvantage.

Presidential Authority

The bill grants the President the authority to take specific actions related to trade when certain conditions are met:

• If the President finds that a foreign country has a significantly higher duty rate for a good than what the U.S. imposes on that good, or
• If the non-tariff barriers imposed by a foreign country create a greater burden compared to those imposed by the U.S.

Actions the President Can Take

Under this authority, the President can:

• Negotiate with the foreign country to reduce tariffs or eliminate non-tariff barriers.
• Impose tariffs that are equal to the rates imposed by the foreign country on the same goods or equivalent to the burdens of non-tariff barriers that country applies.

Factors to Consider

When imposing tariffs, the President must take into account:

• The classification and duty rates of the goods in both the U.S. and the foreign country.
• Physical characteristics and end uses of the goods.
• The effects of current tariffs and non-tariff barriers on trade.

Consultation and Notice

Before taking any action, the President must:

• Consult with the relevant congressional committees about the intended actions.
• Provide public notice and allow for comments on proposed increases in tariffs at least 30 days before they take effect.

Congressional Oversight

Congress has the ability to disapprove the imposition of tariffs through a disapproval resolution, which would require a two-thirds majority vote in both houses of Congress to pass.

Duration of Authority

The President's authority to impose tariffs under this act would be valid for three years, with the possibility of a three-year extension if certain conditions are met.

Definitions

The bill also defines various terms related to trade and tariffs, including:

• Nontariff barrier: Any government-imposed measure, other than tariffs, that restricts or impedes trade.
• Rate of duty: The customs duty applied on imported goods.

Relevant Companies

• Ford Motor Company (F) - May be affected by tariffs on automotive imports from Europe, impacting its pricing and competitiveness.
• General Motors (GM) - Similar to Ford, GM could face higher costs due to retaliatory tariffs affecting their import/export dynamics.
• Tesla Inc. (TSLA) - Tesla imports parts and vehicles internationally and may face increased tariffs impacting costs and sales strategies.
• Amazon.com, Inc. (AMZN) - As a major importer of goods from various international locations, Amazon could see changes in costs associated with tariffs affecting pricing structures.