Republicans Introduce Bill to Apply Section 301 to Chinese Firms' Goods Made Outside China

Rep. Jodey Arrington, R-Texas, a member of the House Ways and Means Committee and chairman of the Budget Committee, recently introduced a bill that would allow the administration to impose Section 301 tariffs on goods made outside of China if they are made by Chinese firms.

The Axing Nonmarket Tariff Evasion, or ANTE Act, has already garnered support from two other Republicans on Ways and Means and one other House Republican.

The bill would require the International Trade Commission to investigate whether a planned investment in the country outside China was being done to export to the U.S. and avoid the Section 301 tariffs on the same product made in China. If the ITC found that the investment was undertaken with the purpose of exporting to the U.S. with a lower tariff burden, the Office of the U.S. Trade Representative would be able to apply the tariff, even before the first goods arrived in the U.S. market.

"While the U.S. has trade enforcement tools that address unfair nonmarket practices, there’s no trade law that addresses tariff evasion in a proactive and targeted manner," the news release announcing the bill said.

The Enforce and Protect Act does target tariff evasion related to antidumping and countervailing duty orders, and those investigations look at whether the manufacturing in the new country counts as substantial transformation -- enough to confer a new country of origin -- and whether the process of completion in the foreign country "is minor or insignificant, [and] whether the value of the merchandise produced in the country subject to the order is a significant portion of the merchandise exported to the U.S." according to an analysis of circumvention actions by Skadden law firm.

This bill would be different, since it would cover goods that haven't been found to have been dumped, but rather, the majority of Chinese exports, which were retaliated against in exchange for Chinese trade practices across that country's economy.

"President Trump took decisive action to curb this, but more still needs to be done,” Arrington said.