Naturalization Amendments of 1987

The United States Reciprocal Trade Act, HR735, grants the President broad authority to impose additional duties on imported goods or negotiate tariff reductions if a trading partner applies higher duties or non-tariff barriers to U.S. exports. This bill specifically targets countries that impose higher tariffs on U.S. goods than the U.S. imposes on their goods, and those with non-tariff barriers. The bill explicitly calls out European protection of their auto markets and states that the President must be able to levy tariffs on global competitors. This creates immediate uncertainty for companies importing goods into the U.S. and directly increases costs for those reliant on foreign supply chains. The money trail for this legislation is not through direct appropriations but through increased costs for importers and potential revenue generation from tariffs. Companies that rely heavily on imported components or finished goods will see their cost of goods sold increase, impacting profitability. Conversely, domestic manufacturers, particularly in the automotive sector, stand to benefit from reduced competition from foreign imports due to higher tariff costs. The bill's findings specifically mention European auto markets and the dumping of cheap European cars into the U.S., indicating a clear focus on this sector. Historically, similar trade actions have had significant market impacts. In 2018, when the Trump administration imposed tariffs on steel and aluminum imports under Section 232, domestic steel producers like U.S. Steel ($X) saw their stock price increase by over 20% in the months following the announcement, while companies reliant on imported metals faced increased costs. Similarly, the imposition of tariffs on Chinese goods in 2018-2019 led to increased costs for many U.S. retailers and manufacturers, while some domestic producers saw a competitive advantage. The bill's findings explicitly reference the Trump presidency's tariffs shrinking the trade deficit with China, indicating a historical precedent for the intended outcome. Specific winners from this legislation include U.S. domestic automotive manufacturers like Ford Motor Company ($F), General Motors ($GM), Stellantis ($STLA), and Tesla ($TSLA), as they will face less price competition from foreign imports. Manufacturers of components and raw materials in the U.S. will also benefit. Losers include foreign automotive companies that export to the U.S., such as Toyota Motor Corporation ($TM), Honda Motor Co., Ltd. ($HMC), Mercedes-Benz Group AG, BMW AG, and Volkswagen AG, as their products will become more expensive in the U.S. market due to tariffs. U.S. companies that rely on imported parts for their manufacturing processes will also see increased costs. The bill is currently in the House and has been referred to the Committee on Ways and Means and the Committee on Rules. The sponsorship by Rep. Moore, Riley [R-WV-2] and 10 cosponsors, including several senior members, indicates moderate legislative momentum. The bill is effective for three years, subject to renewal, creating a medium-term impact horizon.