A bill now in the U.S. House would dramatically change how penalties are handled for "unfair" foreign competition in manufactured goods, particularly those from China.

H.R. 5960, titled the "Supporting America's Manufacturers Act" (SAMA), essentially eliminates all balancing mechanisms and silences dissenting opinions once the ITC votes that a trade penalty should be applied in a particular case.

Under the current system, U.S. domestic manufacturers can petition the International Trade Commission, claiming damage to the domestic business from "unfair" foreign competition.

If the ITC investigates and agrees unfair harm has been caused by foreign competition, the commission may vote to establish a package of trade adjustments, ranging from tariffs and duties to quantity and/or value restrictions on those affected imports.

That recommended package of trade adjustments is then presented to the U.S. Trade Representative and the President for approval and sign-off. If the President approves, the package is sent to the ITC and Customs and Border Protection for enforcement.

As written, H.R. 5960 adds several layers of complexity. First, at the ITC trade adjustment phase, it denies penalty-phase voting rights from commissioners who did not vote in favor of sanctions. With no dissenting positions allowed, penalties applied are likely to be far higher than if they are reached by negotiation. Several observers have already noted this change alone seems to violate several of laws and protections.

The bill also includes language specifically targeting China for higher levels of scrutiny and potential sanctions.

Next, the bill would fast-track all sanctions recommended by the ITC, implementing them if no action is taken to stop them. This reverses the current system, which invokes trade sanctions only when they are specifically approved and signed off. The bill also dramatically shortens the review period before which sanctions are automatically applied.

H.R. 5960 also places restrictions on Presidential review of suggested trade sanctions, requiring a short-period response to all ITC trade investigations and immediate implementation of trade sanctions is no response is received. It also requires the President to present detailed justification for any trade sanction suggested by the ITC is not approved -- the current system is simply up or down.

Lastly, the bill gives Congress the opportunity to override any determination. That is, if penalties failed to be approved anywhere along the line, Congress grants itself the ultimate opportunity to put penalties in place anyway, through a joint vote.

Sponsoring Representative, Jason Altmire, said: "Giving manufacturers a say in deciding whether to follow the International Trade Commission's recommendations will help to ensure manufacturers are not unfairly denied assistance on the basis of ideology alone."

None of the trade experts contacted by eBearing were supportive of the legislation. One said: "It upends the entire established system of trade sanctions, treats the ITC commissioners with total disrespect, props open the door for barely-controlled protectionism, and eliminates most of the checks and balances in the system. But worst of all, it creates an entirely new layer of Congressional oversight, ripe for abuse by companies eager to promote trade sanctions through heavily-funded lobbying efforts and large political donations."

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