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Adds a new paragraph (4) to subsection (c) of 19 U.S.C. 1862 clarifying that Presidential actions under paragraph (1) apply to articles produced, manufactured, or finally assembled by foreign adversary parties or entities owned/controlled/directed/operated by such parties; and adds definitions for 'control', an equity threshold for inclusion, 'foreign adversary country' (listing specific countries), and 'foreign adversary party' (listing categories of governments and entities and including entities involved in PRC industrial policies/military-civil fusion).
Adds a new subsection (h) to 19 U.S.C. 2253 that treats articles produced, manufactured, or finally assembled by foreign adversary parties or entities owned/controlled/directed/operated by such parties as if they originated in a foreign adversary country, and adds definitions for 'control', 'foreign adversary country', 'foreign adversary party', and ownership thresholds.
Adds a new paragraph (10) to 19 U.S.C. 2411(d) clarifying that actions under the section with respect to a 'foreign adversary country' apply to articles produced, manufactured, or finally assembled by foreign adversary parties or entities owned/controlled/directed/operated by such parties, and adds definitions for 'control', an equity-ownership threshold (25% over a most recent 12-month period), 'foreign adversary country' (lists specific countries and a conditional designation for Venezuela), and 'foreign adversary party' (including governments, entities organized under those countries' laws, entities headquartered there, and entities substantively involved in PRC industrial policies or military-civil fusion).
Treats goods as if they originate in a listed “foreign adversary country” whenever they are produced, manufactured, or finally assembled by a foreign adversary party or by an entity owned, controlled, directed, or operated by such a party. It adds parallel rules to three U.S. trade authorities so those articles can be targeted for trade enforcement, remedies, or national-security restrictions. The bill defines key terms (including a 25% equity threshold for “control”), lists which countries count as foreign adversaries, and explains types of ownership/financial arrangements that bring an entity within scope. The change increases the ability of U.S. trade and national security policymakers to treat goods as coming from adversary countries for enforcement under covered trade statutes, with likely effects on importers, supply chains, and companies with foreign ownership or financing links to listed adversaries.
Any action taken by the Trade Representative under Section 301(d) with respect to a foreign adversary country shall apply to any article that is produced, manufactured, or that underwent final assembly by a foreign adversary party or by an entity owned, controlled, directed, or operated by a foreign adversary party, and such an article shall be treated as if it originated in the foreign adversary country.
The term "control" is given the meaning provided in section 800.208 of title 31, Code of Federal Regulations, as in effect on the date of enactment.
An entity is included if, on any date during the most recent 12-month period, not less than 25 percent of the equity interests in that entity are held directly or indirectly by one or more foreign adversary parties, including through co-investment vehicles, joint ventures, or similar arrangements.
The term also covers entities influenced via a derivative financial instrument or contractual arrangement between the entity and a foreign adversary party, including instruments or contracts that seek to replicate any financial return with respect to such entity or interest in such entity.
The term "foreign adversary country" is defined to include: the People’s Republic of China; the Russian Federation; the Islamic Republic of Iran; the Democratic People’s Republic of Korea; the Republic of Cuba; and the Bolivarian Republic of Venezuela during any period when Nicolás Maduro is President.
Who is affected and how:
Importers and U.S.-based firms that buy, assemble, or sell foreign-made goods: They may face new restrictions, additional origin documentation requirements, or designation of their goods as coming from a listed adversary country. That can trigger tariffs, exclusion, or other trade remedies.
Foreign-owned or -financed entities with ties to listed adversary countries: Entities that are at least partially owned or effectively controlled (including via contracts or financing) by listed adversary parties may see their products treated as originating from those adversary countries even if some work occurs elsewhere. The 25% equity threshold and the enumerated contractual/financial arrangements can capture minority investments and certain financing relationships.
U.S. manufacturers and supply chains: Downstream U.S. businesses that rely on inputs or components from covered entities may face supply disruptions, higher compliance costs, or the need to re-source components to avoid trade restrictions.
Trade and national security agencies: USTR, the President and agencies using Section 232, Customs and Border Protection, and other enforcement entities will have expanded authority and definitional clarity to apply trade remedies and national-security restrictions.
Consumers and downstream purchasers: If measures are applied, consumers could see higher prices or reduced availability for goods that are subject to tariffs, exclusion, or supply-chain adjustments.
Foreign governments and exporters: Countries and companies designated as foreign adversaries (and their affiliates) could face reduced access to U.S. markets or increased barriers; this could raise diplomatic tensions or lead to retaliatory measures.
Overall effect: The legislation strengthens U.S. ability to target goods tied to adversary countries by broadening the concept of origin to include entities controlled or substantially financed by adversary-linked parties. That expands enforcement tools but also raises compliance burdens and potential disruption for global supply chains that include entities with the specified ownership or financing relationships.
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Read twice and referred to the Committee on Finance.
Introduced January 21, 2025 by Richard Lynn Scott · Last progress January 21, 2025
Read twice and referred to the Committee on Finance.
Introduced in Senate