United States Reciprocal Trade Act
The United States Reciprocal Trade Act would authorize the President to take actions against trading partners whose treatment of U.S. goods is less favorable than the U.S. treatment of their goods. When the President determines that a foreign country imposes significantly higher duties on a particular U.S. good or imposes tougher non-tariff barriers, the President can either negotiate for better access or impose a duty on that good that mirrors the foreign country’s rate or its effective non-tariff burden. The goal is to create reciprocity in market access, encouraging partners to lower barriers to U.S. exports and address unequal trade conditions. The bill includes oversight by Congress, a public- comment and advisory process, a Congressional disapproval mechanism, and a sunset provision that limits the authority to three years (with the possibility of extension if Congress does not disapprove). In short, the bill would give the President a formal toolkit to push trading partners toward more reciprocal trade terms, while providing Congress with leverage and oversight to curb or block such actions.
Key Points
- 1Threshold for action: The President can act when a foreign country’s duty on a U.S. good is significantly higher than the U.S. duty on that good, or when the foreign country’s non-tariff barriers (NTBs) are significantly more burdensome than U.S. NTBs for that good.
- 2Authorized actions:
- 3- Negotiate an agreement with the foreign country to reduce tariffs or eliminate NTBs.
- 4- Impose a rate of duty on the imported good that matches the foreign country’s rate or the foreign NTB’s effective burden.
- 5Factors to consider: The President would weigh tariff classifications, actual duty levels, product characteristics, end uses and competitive relationships, export levels, and the impact of NTBs on trade and transparency, among other factors.
- 6Oversight and process: The USTR and relevant agencies must advise on the effective rate of duty in NTB cases. Notices and public comment procedures are required before certain actions, along with consultation with congressional committees.
- 7Disapproval and checks: Congress can pass a disapproval resolution (by a two-thirds vote) to stop the action, triggering a legislative check on the President’s use of these powers.
- 8Sunset and extension: The authority to impose increases under reciprocal NTB actions lasts three years from enactment, with a possible three-year extension if the President requests it and Congress does not disapprove.
- 9Reporting: Before entering an agreement under the tariff-reducing option, the USTR must report to Congress on how the agreement would be implemented and its effects on U.S. business competitiveness and consumers.