On June 7, 2023, Senators Sherrod Brown and Todd Young introduced the Leveling the Playing Field 2.0 Act, which would amend that Tariff Act of 1930 to give the U.S. Department of Commerce (“Commerce”) and Customs and Border Protection (“CBP”) broader power to address unfair trade practices.  A substantially similar companion bill was introduced in the House by Representative Terri Sewell.  The Senate bill has been referred to the Finance Committee and currently has a total of 15 cosponsors.  The House bill has been referred to the Ways and Means Committee and has 9 cosponsors.

The biggest shifts in the law, if passed, would be the ability of Commerce to countervail transnational subsidies; the ability to expedite the investigatory process for successive antidumping (AD) and countervailing duty (CVD) investigations; updated procedures for circumvention inquiries; and limiting the ability to file protests in evasion findings by CBP.  Additionally, the bill clarifies circumstances under which Commerce can find that a “particular market situation” exists, as well as gives it power to investigate currency undervaluation as a countervailable subsidy.

Transnational Subsidies

Currently, Commerce is not able to countervail subsidies that flow from a government outside of the recipient’s location.  The proposed statutory modification would be a significant change in the way Commerce applies the countervailing duty law.  The new law would give Commerce the authority to apply a countervailing duty to transnational subsidies and treat third-country funding as if it has been provided by the recipient’s own government, when the subject country’s government facilitates the subsidy.

The Senate and House bills mirror provisions in regulations recently proposed by Commerce.  The regulations, if implemented, would be a parallel track through which Commerce’s power would shift with respect to administering trade remedy laws.  The proposed regulations note that the practice of governments subsidizing foreign production has become increasingly prevalent, so the rule aims to give Commerce the power to countervail transnational subsidies by eliminating an old regulation (19 C.F.R. § 351.527) explicitly preventing this practice.  The proposed regulations were published on May 9, 2023, and the public comment period lasts until July 10, 2023. 

Successive Investigations

The bills would create a faster process for investigating cases involving imported merchandise of a same or similar class or kind in a concurrent or recently completed investigation.  The proposed statute defines a recently completed investigation as one where a final determination was made within the past two years.

Under the new provisions, the administering authority will be able to use findings from a concurrent or recently completed investigations to expedite a successive investigation and thereby reduce the time and resources spent.  This change would come into play when production moves to a different country to resume operations after a duty is imposed.

The proposed law specifies that in determining the impact on the domestic industry in a successive investigation, the following must be considered:

• the condition of the domestic industry found in a recently completed investigation,
• the effect of concurrent or recently completed investigations on the financial performance of the domestic industry, including the likelihood of a continuation or recurrence of material injury, and
• any prior injury determinations involving imports of the merchandise.  

A finding of no material injury in a successive investigation due to recent improvements in the domestic market related to relief from a concurrent or recently completed investigation is strictly forbidden in the proposed legislation.

The bills specify that a preliminary determination in successive CVD cases will be made within 85 days of the initiation of the investigation, and a final determination will be made within 75 days of the preliminary determination.  In an AD investigation, a preliminary determination must be made within 140 days, and a final determination will be made within 75 days of that.  The deadlines for successive investigation determinations may be postponed at the request of the petitioner, similar to the current statute.

Changes to Circumvention Inquiries

The Senate and House bills would both modify the timeline for circumvention inquiries. Currently, the Tariff Act of 1930 only requires that circumvention determinations be made within 300 days of initiation to the extent practicable.  The specific timeline for circumvention inquiries is currently laid out in Commerce’s regulations (19 C.F.R. § 351.226).  The bills would create a statutorily required timeline for the entirety of the circumvention inquiry process.  This shift would create a more rigid procedure, as opposed to timelines crafted in regulations, which are more easily changed.  The bills propose the following changes:

Action	Current Regulatory Timeline	Proposed Statutory Timeline	Proposed Regulatory Timeline
Initiation or Denial	30 days with a maximum 15-day extension	45 days with a maximum 15-day extension	30 days when there is enough information on the record   45 days when a determination cannot be made in 30 days but no new information is submitted   60 days when additional information is submitted
Preliminary Determination	Within 150 days of initiation	Within 150 days of initiation with a maximum 60-day extension	Within 150 days of initiation
Final Determination	Within 300 days of initiation	Within 150 days of a preliminary determination with a maximum 65-day extension	Within 300 days of initiation

The proposed regulations would also extend the deadline for a preliminary determination from 150 days to 240 days after the initiation, and Commerce would retain its current ability to extend non-statutory deadlines for “good cause.”

Limitations on Protests

Another important change proposed in the law is a new limitation on the scope of protestable decisions by CBP.  Specifically, the Senate and House bills would mandate that an importer cannot protest CBP’s liquidation or reliquidation of merchandise after the agency determines that the merchandise has entered the United States through evasion.  This would be a departure from the current practice, which gives importers 180 days to protest any such decisions by CBP.   

Written with the assistance of Emily Loftis, a summer associate in the Husch Blackwell LLP Washington, D.C. office.