USTR Can Cut Third-Country Tariffs Near Zero in Russia Sanctions Draft
The Russia sanctions bill draft lets USTR cut a third-country tariff to nearly zero without using the congressional review process reserved for termination.
Primary lensTrade policy
Sub-topicPolicy monitoring
Evidence base7 records used
Use casePolicy monitoring
Senate Finance ranking member Ron Wyden and House Ways and Means ranking member Richard Neal objected this week to a revised Russia sanctions proposal that could put tariffs of up to 100 percent on major trading partners. Their U.S. Senate Finance and House Ways and Means statement on Sanctioning Russia Act tariff power framed the dispute as a delegation problem. Congress, they argued, would be unable to stop the president from raising or lowering the rate.
A sponsor-published shows exactly where that concern attaches. Section 113 would place country-wide duties on goods from certain major buyers of Russian oil or gas and countries found to facilitate sanctions evasion. The president could set the initial rate anywhere up to 100 percent. For a country that satisfies section 113(c), USTR could later move it to any rate above zero and up to 100 percent after making a specified finding. Neither route uses the congressional review process that the draft reserves for formally terminating a duty.
This creates a tariff that can remain legally active but become cheap to pay. A one percent rate is only an illustration, not a forecast. It would still stack with other applicable duties and keep customs compliance active. But it could remove most of section 113's added cash burden without ending the tariff or opening the draft's termination review window.
The source needs a status warning. Its cover carries a Senate Legislative Counsel identifier, but the bill number, date, and committee line are blank. The Congress.gov S.1241 bill record still shows only the April 1, 2025 introduced text. The provisions below are in a sponsor-published draft, not an authenticated new version filed on Congress.gov. They can change before introduction, amendment, or passage.
The review gap begins with the initial rate
Draft section 113(a) tells the president to increase the rate on goods from a covered country to a rate of up to 100 percent. That is a ceiling without an express floor. The initial action could therefore select a high rate or a nominal one. Draft section 113(g) requires a written justification at least 10 days before imposition, including the substantive rationale for the rate and the methodology used to identify the country. It does not require a vote or a waiting period for a joint resolution.
Draft section 113(b) keeps the same structure after imposition. USTR shall modify or adjust a duty to a rate greater than zero and up to 100 percent after submitting a written determination that the country took significant steps to increase Russian oil or gas trade or to decrease or cease it. A separate section 113(g) justification must go to the appropriate committees at least 10 days before the change.
The positive-rate condition prevents USTR from using section 113(b) to set the duty at exactly zero. It does not supply a minimum that preserves coercive force. One basis point, one tenth of one percent, and one percent all fit the stated range. Those examples illustrate the text. The draft provides no formula that maps a change in Russian energy trade to a particular rate.
A positive rate keeps the termination gate closed
The draft has separate procedures for changing a rate, waiving a duty, and terminating it. A section 113 adjustment uses the finding and committee-report process just described. Draft section 115(b)(4) makes the boundary explicit. It exempts a section 113(b) rate modification from the presidential waiver report while preserving the section 113 determination and justification requirements.
A waiver follows a different route. Draft section 115 lets the president waive any duty after certifying in writing that the action serves the national interests of the United States and reporting the basis to Congress. The report is unclassified, although it may include a classified annex. The section does not add the 30-day or 60-day pause that applies to termination.
Draft section 117 supplies that stronger process. For a third-country duty, the president must certify that the government is no longer engaging in the triggering activity and provide reliable assurances about future conduct. Termination then waits 30 calendar days. The window expands to 60 days for a report submitted from July 10 through September 7. Congress may use the period to enact a joint resolution of disapproval.
Section 117 reviews the exit, not the size of the relief. A nominal positive rate leaves the tariff available for a later increase, although another increase would require a new section 113(b) determination and a separate 10-day justification.
Notice and review do different jobs
Committee notice creates a contemporaneous record. The draft section 113(g) report must explain the rate and the methodology used to identify the country. That can support oversight, force agencies to state a rationale, and give the trade committees a document against which to test later changes.
The report does not delay the rate beyond its 10-day lead time while Congress decides whether to block it. The text does not require publication or create expedited legislation for a rate adjustment. Once the notice period ends, the new rate can take effect without a congressional vote.
Termination uses a longer pause and a detailed joint-resolution procedure. Even that brake is difficult to operate. Draft section 117(c)(4) requires three-fifths of the Senate to proceed to a disapproval resolution and three-fifths to pass it. The resolution must then complete the constitutional lawmaking process before it can prevent termination.
A committee can object to a rate change during those 10 days. The text gives it no comparable procedure for holding the change while Congress acts.
The House-passed GovInfo H.R.2913 engrossed House text is not a ready-made rule for tariff-rate changes. Its section 321 review covers a proposal to terminate specified sanctions, export controls, duties, or prohibitions, a waiver of specified sanctions imposed on a person, and a licensing action that significantly alters United States foreign policy with respect to Russia. Section 319 separately requires advance notice for a person-specific sanctions waiver.
Current 22 U.S.C. 9511 CAATSA review statute uses a similar boundary for enumerated Russia measures, person-specific waivers, and significant licensing actions. Neither provision establishes that a reduction in the sponsor draft's country tariff would receive review. The useful comparison is narrower. Congress has previously written review rules that look beyond formal termination to other specified forms of sanctions relief.
The rate notice is the missing public instrument
Draft section 113(g) sends the rate justification and country methodology to the appropriate congressional committees. The draft does not direct USTR to publish that report or maintain a public history of rate changes.
Customs and Border Protection will still need an operative public instrument to collect the duty. A proclamation, Federal Register notice, USTR notice, or CBP instruction could do the work. The draft does not say which document controls when those sources differ or one lags another.
At a minimum, the notice has to connect the covered country, the operative rate, its effective time, and the CBP implementation. Without that chain, an importer can have the right designation and the wrong rate.
For a country that satisfies section 113(c), the stacking rule is not open. Draft section 113(f) says the duty is additional to other charges, including antidumping and countervailing duties and measures under sections 232 and 301. The public instrument must translate that rule into an entry instruction a broker can apply.
The timing risk starts before the customs entry
A purchase order can be priced at one section 113 rate and reach the border under another. Coverage may not change in between. Only the rate does.
That timing turns the notice into a contracting issue. A landed-cost quote should identify the rate version behind it and state who bears an increase before entry. Goods in production or on the water need a separate exposure calculation until the implementing instrument supplies an in-transit rule.
Suppose an importer signs a purchase order when the section 113 duty is one percent. While the goods are on the water, USTR raises it to 50 percent after the required reports. The country never leaves the covered list, so sanctions screening produces no new alert. An internal system may still show covered while the landed-cost estimate remains tied to the old rate. Any dispute then turns on the contract's duty clause and the effective-time rule, not on whether the country was designated. A rate change needs to trigger procurement and logistics review even when sanctions status does not move.
The nominal rate does not switch compliance off. Origin substantiation, broker instructions, contract clauses, customs codes, and audit support can remain necessary even when the incremental cash duty is low. A positive rate also leaves the customs mechanism in place for a later increase after the required finding and notice.
A broker cannot resolve a missing policy record. The company's own file must connect the rate used for a quote with the rate declared at entry and explain any change between them.
The weak point is the policy-to-customs handoff
Policy teams will watch the Russian energy or evasion determination. Customs teams will watch the HTS change. Procurement will see the cost first. Those functions can each be current and still disagree about which rate applies to a shipment.
The handoff needs one owner for rate versions. That owner should link the designation record to the public rate instrument and the CBP instruction, then send a dated change notice to procurement, logistics, and the broker. A sponsor summary may explain the policy. It cannot prove the amount due on an entry date.
That same record should survive the entry. If CBP later asks why a company used a nominal rate rather than the earlier high rate, the answer has to show the operative instrument and timing, not merely that the country remained covered.
This is the unusual feature of the draft. A major cash-duty change can arrive without the obvious legal event that normally tells a company to reopen its sanctions file.
A material rate cut needs its own review trigger
The text could treat a rate below a stated floor as a termination for review purposes. It could instead apply review when a reduction exceeds a specified number of percentage points. Either approach would tie the congressional process to economic effect.
The same provision could require USTR and CBP to publish a linked rate notice before the change. Committees would retain the fuller methodology report, while importers would get the rate, effective time, and customs instruction needed to file an entry.
What would change the calculus is not a different headline ceiling. It is a filed text that connects a material rate cut to review and public implementation. Until then, the important event for an exposed importer is the rate notice that changes what is owed at the border while the tariff remains in force.
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