WASHINGTON — The Coalition for a Prosperous America (CPA) today announced its strong support for bipartisan legislation introduced by U.S. Senators Thom Tillis (R-NC) and Sherrod Brown (D-OH). Their bill, the Fighting Trade Cheats Act of 2023, would strengthen U.S. trade law enforcement and also give domestic American manufacturers the ability to sue companies that engage in customs fraud.
“As the president of a manufacturing company in Illinois, I know from personal experience that trade cheating happens all the time,” said CPA Chair Zach Mottl. “Overseas manufacturers collaborate with unscrupulous importers to bypass U.S. duties and dumping laws. Strong trade legislation is needed to finally hold them accountable. We’re grateful to Senators Tillis and Brown for tackling such a serious problem.”
The new, bipartisan legislation would amend the U.S. Tariff Act of 1930 to increase penalties and improve enforcement related to customs fraud. Specifically, the legislation aims to “to prevent commercial fraud…and prevent the use of shell companies by importers that seek to evade the customs and trade laws of the United States.”
Domestic American manufacturers frequently bring trade cases against subsidized imports that are sold at below the cost of production. However, even when U.S. firms obtain anti-dumping and countervailing duty remedies from the federal government, importers and producers often evade them. This happens through trans-shipment schemes, false documentation, and the use of shell companies to hide import data. Complicating matters is the inability of U.S. Customs and Border Protection (CBP) to pursue investigations beyond the initial importer of record.
“At present, when importers are caught evading U.S. duties, they’re simply ordered to pay them,” said Michael Stumo, CEO of CPA. “But there are no other penalties. And the importers and businesses that help to facilitate this lawbreaking face absolutely no penalties or prosecution whatsoever. This bill changes that. Those who aid and abet trade cheating will finally face liability.”
The new legislation would allow domestic U.S. firms to directly sue importers and companies that violate U.S. trade laws. Allowing them to file cases in civil court—and not wait for government action—could speed the process of confronting serial abusers.
“This legislation is long overdue,” continued Stumo. “Foreign producers and unscrupulous importers continue to game the system at the expense of domestic manufacturers and their employees. There’s no reason to allow such glaring exploitation of America’s extremely generous consumer market. Congress should stand up for domestic producers and swiftly pass this bill.”