Findings of Congress

Congress makes the following findings: (1)Since 1997, the United States current account deficit, the broadest measure of United States international trade, has grown substantially, both absolutely and relative to gross domestic product (GDP), increasing from $140,400,000,000 in 1997 (1.7 percent of GDP) to $791,000,000,000 in 2005 (6.3 percent of GDP). (2)Strong manufacturing and agricultural sectors are important to nurturing and sustaining the health and security of the Nation’s economy. The persistent current account deficit weakens United States manufacturing and agriculture and causes the loss of United States jobs. It can be estimated that the 2005 merchandise trade deficit cost the United States up to 15,000,000 jobs. (3)The direction and trend of the current account deficit is unsustainable in the long run and needs immediate corrective action. (4)It is critical to the Nation’s economic future that the current account deficit be addressed by adopting statutory changes that will eliminate some of the causes of the trade deficit and will begin to move the Nation to a positive trade balance.

Mandatory Presidential action whenever the United States current account deficit exceeds 2 percent of the United States Gross Domestic Product

Section 122 of the Trade Act of 1974 (19 U.S.C. 2132) is amended— (1)by redesignating subsections (c) through (h) as (d) through (i), respectively; and (2)by inserting after subsection (b) the following new subsection (c):

(c)

Mandatory Presidential proclamation of temporary import surcharge whenever the United States current account deficit exceeds 2 percent of the gross domestic product

(1)

In general

Notwithstanding the provisions of subsections (a) and (b), whenever there is a United States current account deficit that exceeds 2 percent of the gross domestic product, then— (A)for purposes of subsection (a), the President shall determine that fundamental international payments problems do exist that require special import measures to restrict imports; and (B)within 30 days after making that determination, the President shall proclaim, for the period described in paragraph (2), a temporary import surcharge under this subsection in the form of duties (in addition to those already imposed, if any) on articles imported into the United States. (2)

Period of surcharge

The period of the surcharge proclaimed under this subsection is the period beginning on the date on which the surcharge is proclaimed and ending on the date on which there is not a United States current account deficit, or there is a United States current account deficit that does not exceed 1 percent of the gross domestic product. (3)

Amount of surcharge

(A)

Minimum

The amount of the surcharge proclaimed under this subsection shall be not less than 20 percent ad valorem. (B)

Adjustment to ensure period of not more than 24 months

Subject to subparagraph (A), the amount of the surcharge shall be adequate to ensure that the period in which the surcharge applies (as described in paragraph (2)) is not more than 24 months. Whenever the President determines that the amount of the surcharge is inadequate to ensure that the period in which the surcharge applies is not more than 24 months, the President shall increase the amount by at least 1 percent. (4)

Data used in making determinations

Each determination under this subsection shall be made using the most recently available information for a 1-year period compiled by the Bureau of Economic Analysis of the Department of Commerce. (5)

Exceptions

(A)

Country exemptions

Subsection (e)(2) applies to a surcharge proclaimed under this subsection to the same extent that it applies to an import restricting action proclaimed pursuant to subsection (a). (B)

Product exceptions

Subsection (f) applies to a surcharge proclaimed under this subsection to the same extent that it applies to an import restricting action proclaimed pursuant to subsection (a).