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H.R. 764 (116th): United States Reciprocal Trade Act


If a country imposes a certain level tariff for a certain product, should the president be able to unilaterally impose the same level tariff back for that product?

Context

The U.S. sometimes imposes tariffs that are far lower than other nations impose on us, sometimes on the exact same products. Critics say this hamstrings American exports and economic output.

A few quick examples from the U.S. Trade Representative:

  • India levies a 50% tariff on American motorcycles, but America only levies a 2.4% tariff on Indian motorcycles.
  • The European Union levies as high as a 67% tariff on American pork, but America only imposes a tariff as high as 6% on E.U. pork.
  • Japan levies a 17% tariff on American apples, but America levies no tariff on Japanese apples.

What the bill does

The United States Reciprocal Trade Act would allow the president greater authority to impose tariffs equal to the levels other nations impose on the U.S.

So to continue the examples above, the president would be able to almost instantly impose 50% tariffs on Indian motorcycles, 67% tariffs on European Union pork, and 17% tariffs on Japanese apples — if he so chose.

It was introduced on January 24 as bill number H.R. 764, by Rep. Sean Duffy (R-WI7).

What supporters say

Supporters argue the bill helps balance the economic scales, reversing what they perceive as a financial environment disadvantaged against America.

“American workers, farmers, and manufacturers are the hardest working and most productive people in the world. And if they’re given a level playing field, they can compete and win against anyone else on earth,” Rep. Duffy said in a press release. “Unfortunately, the current trade system allows other countries to put massive tariffs on our products without any repercussions.”

“That’s why my legislation would give the President the tools necessary to pressure other nations to lower their tariffs and stop taking advantage of America,” Rep. Duffy continued. “The goal of the U.S. Reciprocal Trade Act is _not _to raise America’s tariffs but rather to encourage the rest of the world to lower theirs. The American people deserve free and fair trade, and the Reciprocal Trade Act will be an important step in achieving that goal.”

What opponents say

Opponents worry that increasing tariffs raise prices for domestic consumers, especially in an ever-escalating trade war — and also that the legislation undermines the role of Congress in helping craft and approve trade policies.

“It is now also increasingly clear that the way [Trump’s] tariffs have been used will result in retaliatory tariffs from our largest trading partners and closest allies, and that retaliation will have serious negative economic impacts on the United States,” the U.S. Chamber of Commerce wrote in a letter to Congress. “The tariffs are also undermining U.S. efforts to build an international coalition of like-minded countries to join the United States in combating the use of unfair trade and investment policies.”

“Article I of the Constitution assigns the Congress exclusive authority to regulate foreign trade and levy taxes, including tariffs. Congress used this power to delegate to the President the authority to impose tariffs, without Congressional oversight, to safeguard national security in the Trade Expansion Act of 1962,” the letter continued. “While the president should still have this type of authority, the current circumstances highlight the need for Congress to ensure that the authority will be used, as intended by the Congress, in the overall national interest.”

Odds of passage

The bill has attracted 27 House cosponsors, all Republicans. It awaits a potential vote in either the House Rules Committee or House Ways and Means Committee, very unlikely given Democratic control of the chamber.

President Trump endorsed the legislation in February’s State of the Union address. “Tonight I am also asking you to pass the United States Reciprocal Trade Act so that if another country places an unfair tariff on an American product, we can charge them the exact same tariff on the exact same product that they sell to us,” Trump said.

Last updated Jun 20, 2019. View all GovTrack summaries.

The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on Jan 24, 2019.


United States Reciprocal Trade Act

This bill allows the President, in certain circumstances, to (1) negotiate with a foreign country for tariff reductions on exported U.S. goods, or (2) impose additional duties on imported goods. Specifically, the President may take these actions if it is determined that the country (1) when importing a good from the United States, applies a higher rate of duty on that good than the rate imposed by the United States when imported from that country; or (2) similarly imposes other, nontariff trade restrictions on that good.

The President must terminate a rate of duty increase under this bill if the country no longer applies such higher rates or nontariff trade restrictions, or if the higher rate is no longer in the interest of the United States.

Congress may nullify a rate of duty increase implemented under this bill through a joint resolution.

This bill is effective for three years, subject to one three-year renewal.