Following several unsuccessful legislative attempts in recent years, on February 24, 2025, the “Leveling the Playing Field 2.0 Act” (Leveling 2.0) was reintroduced in the Senate by Senators Todd Young (R-IN) and Tina Smith (D-MN) and in the House by U.S. Representatives Terri Sewell (D-AL) and Beth Van Duyne (R-TX).
The lawmakers argue the bipartisan bill will “level the playing field” between U.S. domestic producers and imports by providing additional tools to the U.S. Department of Commerce (DOC), U.S. International Trade Commission (ITC), and U.S. Customs and Border Protection (CBP) to address duty evasion, circumvention, and whack-a-mole fact patterns with “repeat offenders” in U.S. trade remedy proceedings.
In light of Washington’s current hyperfocus on trade law and policy, the chances are high that Leveling 2.0 will be passed by Congress and signed into law by the Trump Administration.
The legislation was a featured topic of discussion at the February 25, 2025, House Ways and Means Trade Subcommittee Hearing on American Trade Enforcement Priorities. The hearing was attended by a panel of witnesses including former government officials from the U.S. Trade Representative (USTR) from the previous Trump and Biden administrations as well as representatives from the dairy, computer and communications industry, and an intellectual property organization. Members of the subcommittee expressed concern about the loopholes in trade regulations that allow Chinese companies to circumvent duties and tariffs. Examples provided by Members included the de minimis exemption to formal entry requirements and transshipment schemes for avoiding antidumping and countervailing (AD/CVD) duties. While opinions varied regarding the recent tariffs imposed by the Trump administration there was widespread bipartisan support for Leveling 2.0.
The bill focuses mainly on providing additional tools for the DOC and ITC to counteract circumvention fact-patterns more effectively with policies such as:
- Expanding subsidies considered: Traditionally, the DOC would only consider subsidies provided by the government of the country under investigation. In the case of circumvention cases, Chinese companies that are alleged to move operations abroad can receive transnational subsidies from the government under the Belt and Road Initiative. Leveling 2.0 would specify that these Chinese subsidies in a 3rd country could be included in investigations, creating a more accurate picture of subsidies received.
- Targeting repeat offenders and streamlining circumvention cases: The proposed legislation creates an easier mechanism for domestic industries to bring circumvention and follow-on cases against foreign companies that have been targeted by AD/CVD duties. Specifically, the legislation includes timelines for the completion of circumvention inquiries and allows for successive investigations in which the ITC can consider recently completed cases and behavior of foreign producers and exporters in making an injury determination.
- Enhancing tools available to counteract dumping: The legislation explicitly authorizes DOC to make adjustments to prices and costs to offset distortions in the market for inputs used in the production of a good subject to an antidumping duty case. These provisions are intended to address global overcapacity in key sectors that depress prices for raw materials used in overseas production that are not similarly low-priced in the U.S. market due to trade measures in place on those inputs.
- Upgrading CBP’s evasion tools: The legislation expands CBP’s ability to investigate evasion of safeguard actions and limits the ability for importers to protest CBP determinations when CBP finds evasion. Currently, evasion determinations are treated just like other Customs import decisions and importers may protest them within 180 days.
Witnesses in the House subcommittee hearing argued that the Leveling 2.0 legislation has the potential to save time and money for American companies seeking to address unfair trade practices, and that the changes are needed to ensure the U.S. trade laws continue to serve their intended purpose in a landscape of dynamic supply chains and trade flows.
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Cassidy Levy Kent has extensive experience assisting clients navigating trade remedies, as well as on matters related to duty evasion and import compliance. Contact us if you have questions about these developments or their potential impact on your business.