Americas Act Would Change de Minimis, Calls for WH FTA Expansion and Higher Global Tariffs

The Americas Act, the brainchild of Sens. Bill Cassidy, R-La., and Michael Bennet, D-Colo., which has a companion bill in the House from Reps. Maria Salazar, R-Fla., and Adriano Espillat, D-N.Y., aims to "create an ever-expanding and permanent trade partnership of Western Hemisphere countries and counter China’s growing control over global manufacturing and geopolitics."

The changes to de minimis also would exclude China and Russian shippers from de minimis eligibility, which the members estimated would bring in $15 billion in annual tariff revenue.

Cassidy argues that if the tariff rates on some goods rose for all countries, it would drive more investment to USMCA partners and to countries in the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR). He also argues that the change would "reinvigorate the WTO and the global trade environment, and better protect U.S. industry vulnerable to predations of unfair foreign competition."

Even if Costa Rica and/or Uruguay were not allowed to join USMCA, the bill asks the administration to look at harmonizing USMCA, CAFTA-DR and other free trade agreements in the hemisphere so that cumulation of value could apply across FTAs. Cassidy said that should "create economies of scale and reduce the cost of investment and manufacturing."

The bill would allow Ecuador and Uruguay to use Caribbean Basin Trade Partnership Act tariff benefits for certain goods, "with the goal of an eventual full-scale FTA with Uruguay and Ecuador."

Trade promotion authority authorizing these negotiations would be part of the bill, as well.

The bill also offers grants and tax incentives for moving textile and apparel investment from China to the Western Hemisphere; $150 million annually in grants for five years and deductions for sales of textiles and apparel. That money can also be used to move medical device manufacturing to the Western Hemisphere.

CAFTA-DR currently requires that apparel manufacturers use fabric and yarn produced either in CAFTA member countries or in the U.S., unless the good is in short supply. The bill "clarifies the conditions in which fibers, fabrics, and yarns that are not commercially available in the United States may be imported from Western Hemisphere countries with FTAs," and asks the International Trade Commission to study what the commercial availability standard is.

The bill would also establish "a special enforcement unit within CBP to monitor the implementation of the Uyghur Forced Labor Prevention Act (UFLPA). [UFLPA] cheating is a major problem for the Western Hemisphere textile and apparel industries, solar panel industry, and EV sectors."

House Select Committee on China Chairman Rep. Mike Gallagher, R-Wis., endorsed the bill, saying, "We must encourage key industries to start diversifying their supply chains."

“We need to re-level the playing field between freedom-loving democracies and those who exploit the rules, like China. We do that by refocusing on the Western Hemisphere to improve trade, bring manufacturing back to our shores, and end China’s growing influence,” Cassidy said.

Leftist dictatorships in Cuba, Venezuela and Nicaragua would not be included in the bill; however, Bolivia, a democracy that has had some leftist presidents, also would be barred. El Salvador, which has a lower Freedom House ranking than Bolivia, but is also a democracy, is allowed.

“It’s past time we unleash the full economic potential of the United States and Latin America. The Americas Act is THE solution to grow our economy and bring stability to the hemisphere,” Salazar said. “This bill will create world-class business opportunities and jobs in Miami, help our allies in Latin America, build resiliency for American supply chains, and combat China’s influence.”

In addition to its trade provisions, the bill addresses immigration, including creating a new path for elder care workers to work temporarily in the U.S.