Bill Summary – FastDemocracy

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1325 Introduced in Senate (IS)]

<DOC>

119th CONGRESS
1st Session
S. 1325

To amend the Internal Revenue Code of 1986 to impose a fee on certain
products imported into the United States based on the pollution
intensity associated with the production of such products, and for
other purposes.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

April 8, 2025

Mr. Cassidy (for himself and Mr. Graham) introduced the following bill;
which was read twice and referred to the Committee on Finance

_______________________________________________________________________

A BILL

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Foreign Pollution Fee Act of 2025''.

SEC. 2. SENSE OF CONGRESS; PURPOSE.

(a) Sense of Congress.--It is the sense of Congress that--
(1) the United States has led the world in carbon emissions
reductions over the past 15 years, cutting more emissions than
any other nation;
(2) the United States economy is 55 percent more carbon-
efficient than the global average;
(3) on average, goods produced in China generate more than
3 times the carbon emissions of equivalent American-made goods,
while Russian-made goods produce 5 times the emissions, which
gives foreign polluters an unfair cost advantage over American
manufacturers;
(4) Federal environmental regulations impose an estimated
$400,000,000,000 in annual costs on the economy of the United
States, placing a disproportionate burden on American
businesses and workers;
(5) manufacturers in the United States face staggering
environmental regulatory compliance costs, averaging $17,200
per employee, which are costs that foreign competitors,
particularly in China, do not bear;
(6) American businesses spend a higher percentage of their
revenue on environmental compliance than many of their global
competitors, making it harder to compete internationally;
(7) as a result of these costs, companies in the United
States have lost market share to foreign producers operating
under weak, underenforced, or nonexistent environmental
standards;
(8) China is by far the world's worst air and water
polluter, responsible for 30 percent of global carbon
emissions;
(9) the Chinese Communist Party effectively subsidizes its
exports by refusing to enforce basic environmental protections,
undercutting responsible manufacturers in the United States;
(10) China's state-controlled industries operate as an
extension of the Communist Party, using predatory trade
practices, including environmental exploitation, to eliminate
American competition and expand Beijing's control over global
markets;
(11) United States trade policy has given foreign polluters
a competitive edge at the expense of American workers for
decades, rewarding bad actors while punishing responsible
manufacturers in the United States;
(12) China has been the primary beneficiary of these
policies, with the United States losing approximately 5,000,000
jobs in the last 2 decades, with half of that loss directly
attributable to the growing trade deficit with China; and
(13) recognizing and rewarding manufacturers in the United
States for their environmental leadership would strengthen
domestic industry, create high-paying jobs, and reduce
America's dependence on high-emitting producers like China and
Russia.
(b) Purpose.--The purpose of this Act is to level the playing field
for American workers and manufacturers by ensuring that China and other
foreign adversaries cannot exploit weak environmental standards, lack
of enforcement, and noncompliance to gain an unfair advantage in global
trade.

SEC. 3. RULE OF CONSTRUCTION.

Nothing in this Act, or any amendments made by this Act, shall be
construed to authorize the creation of any carbon tax, fee, pricing, or
other mechanism that imposes additional costs to any covered product
(as defined in section 4695(a) of the Internal Revenue Code of 1986, as
added by this Act) which is produced domestically and sold, used,
further refined, or distributed within United States or exported to
another country for sale or use.

TITLE I--FOREIGN POLLUTION FEE

SEC. 101. FOREIGN POLLUTION FEE.

(a) In General.--Chapter 38 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subchapter:

``Subchapter E--Foreign Pollution Fee

``Sec. 4691. Definitions.
``Sec. 4692. Imposition of foreign pollution fee.
``Sec. 4693. Determination of variable charge.
``Sec. 4694. Calculation of pollution intensity.
``Sec. 4695. Treatment of international partnerships.
``Sec. 4696. Covered products.
``Sec. 4697. Advisory Committee on Global Pollution Challenges.
``Sec. 4698. Establishment process and reassessments.

``SEC. 4691. DEFINITIONS.

``For purposes of this subchapter--
``(1) Administrator.--The term `Administrator' means the
Administrator of the Environmental Protection Agency.
``(2) Advisory committee.--The term `Advisory Committee'
means the Advisory Committee on Global Pollution Challenges, as
established under section 4697.
``(3) Appropriate congressional committees.--The term
`appropriate congressional committees' means the Committee on
Finance of the Senate and the Committee on Ways and Means of
the House of Representatives.
``(4) Baseline pollution intensity.--The term `baseline
pollution intensity' means the pollution intensity associated
with production of a covered product in the United States.
``(5) Carbon dioxide equivalent.--The term `carbon dioxide
equivalent' means, with respect to a greenhouse gas, the
quantity of such gas that has a global warming potential
equivalent, determined over a 100-year period, to 1 metric ton
of carbon dioxide, as determined pursuant to table A-1 of
subpart A of part 98 of title 40, Code of Federal Regulations,
as in effect on January 1, 2025.
``(6) Carbon removal.--The term `carbon removal' means--
``(A) the capture of carbon oxides directly from
ambient air (or, in dissolved form, from seawater), and
``(B) the sequestration of such carbon oxides which
results in the net removal of atmospheric carbon oxides
on a lifecycle basis.
``(7) Country of origin.--The term `country of origin'
means, with respect to a covered product--
``(A)(i) in the case of steel, the country in which
the steel was melted and poured,
``(ii) in the case of aluminum, the country in
which the aluminum was smelted and cast, or
``(iii) in the case of any other covered product,
the country in which a covered product was produced, or
``(B) the last country in which a covered product
was substantially transformed, as determined in a
manner consistent with U.S. Customs and Border
Protection procedures, directly prior to importation
into the United States.
``(8) Covered entity.--The term `covered entity' means the
importer of record of a covered product at the time of the
importation of such product.
``(9) Direct emissions.--The term `direct emissions' means
pollution from the facility where a product is produced,
including pollution from the combustion of fuels and process
emissions from chemical or physical transformations resulting
from the production process.
``(10) Foreign entity of concern.--The term `foreign entity
of concern' has the same meaning given such term in section
40207(a)(5) of the Infrastructure Investment and Jobs Act (42
U.S.C. 18741(a)(5)).
``(11) HTS.--The term `HTS' means the Harmonized Tariff
Schedule of the United States.
``(12) Indirect emissions.--The term `indirect emissions'
means pollution from the production of electricity, heating,
and cooling which are--
``(A) produced outside the facility where a product
is produced, and
``(B) consumed during the production process.
``(13) Input material or precursor.--The term `input
material or precursor' means any material or product (other
than fuel) which is--
``(A) incorporated into a covered product, or
``(B) consumed during the production process of a
covered product.
``(14) International partnership agreement.--The term
`international partnership agreement' means an international
partnership agreement established pursuant to title II of the
Foreign Pollution Fee Act of 2025.
``(15) Nonmarket economy country.--The term `nonmarket
economy country' means any foreign country that the Secretary
of Commerce determines, pursuant to section 771(18) of the
Tariff Act of 1930 (19 U.S.C. 1677(18)), does not operate on
market principles of cost or pricing structures, so that sales
of merchandise in that country do not reflect the fair value of
merchandise.
``(16) Pollution.--The term `pollution' refers to emissions
of--
``(A) carbon dioxide,
``(B) hydrofluorocarbons,
``(C) methane,
``(D) nitrous oxide,
``(E) perfluorocarbons,
``(F) sulfur hexafluoride, and
``(G) any other anthropogenically-emitted gas which
has been identified by the Secretary (in accordance
with the notice and comment procedures under section
553 of title 5, United States Code) for purposes of
this subchapter.
``(17) Pollution intensity.--The term `pollution intensity'
means the amount of pollution, expressed in metric tons of
carbon dioxide equivalent, which is emitted into the atmosphere
in the production of a metric ton of a covered product, as
determined pursuant to the requirements described in section
4694(c)).
``(18) Pollution intensity difference.--The term `pollution
intensity difference' means, with respect to any covered
product, the difference (expressed as a percentage) between--
``(A) the pollution intensity associated with
production of such product in the country of origin,
and
``(B) the baseline pollution intensity with respect
to such product.
``(19) Precursor emissions.--The term `precursor emissions'
means pollution (including any direct or indirect emissions)
emitted into the atmosphere in the production of an input
material or precursor.
``(20) Producer.--The term `producer' means the entity
responsible for the manufacturing of a product.
``(21) Product.--The term `product' means any article,
regardless of whether such article is--
``(A) exported from the country of origin, or
``(B) produced and sold only within the country of
origin.
``(22) Recycled material.--The term `recycled material'
means a material that is used in place of, or to reduce the use
of, a primary, raw, or virgin material in the manufacturing of
a product.
``(23) Relevant federal agency.--The term `relevant Federal
agency' means--
``(A) the Department of Energy,
``(B) the Office of the United States Trade
Representative,
``(C) the Department of Commerce,
``(D) the Department of State,
``(E) the Environmental Protection Agency,
``(F) the Council on Environmental Quality,
``(G) the Office of Science and Technology Policy,
and
``(H) the Department of Homeland Security.
``(24) Transportation emissions.--The term `transportation
emissions' means pollution from the transport of a covered
product, or an input material or precursor, across
international borders prior to entry into the United States.

``SEC. 4692. IMPOSITION OF FOREIGN POLLUTION FEE.

``(a) In General.--
``(1) Imposition of fee.--In the case of any covered
product which is imported by a covered entity into the United
States after the applicable date, there is hereby imposed an ad
valorem fee upon entry or importation of such covered product
in an amount equal to the product of--
``(A) the customs value of such covered product
which is imported into the United States, and
``(B) the variable charge (as determined under
section 4693).
``(2) Applicable date.--For purposes of paragraph (1), the
applicable date shall be the date which is 6 weeks after the
date of enactment of this subchapter.
``(b) Fee Due.--
``(1) In general.--The fee imposed under this section with
respect to any covered product shall be paid by the covered
entity which imported such product at the same time, and
through the same electronic portal, that any payment of custom
duties are made.
``(2) Security for fees.--The Secretary may issue such
regulations or other guidance to require, or may direct
officers of U.S. Customs and Border Protection to require, a
covered entity to file with the Secretary a bond or other
security in such amount and with such conditions as the
Secretary determines necessary to ensure payment of the fees
imposed under this section.

``SEC. 4693. DETERMINATION OF VARIABLE CHARGE.

``(a) In General.--
``(1) Initial application.--For purposes of the period
beginning on the day after the applicable date under section
4692(a)(2) and ending on the date on which the final rules
under section 4698(b) are issued, the variable charge with
respect to any covered product shall be determined under the
following table (as determined pursuant to the applicable
country of origin and applicable category under section 4696
with respect to such covered product):

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Paragraph Paragraph Paragraph
(4) or Paragraph Paragraph (3), (6), (7) or Paragraph Paragraph
``Country of Origin (5) of (1) of (2) of or (8) of (9) of (10) of (11) of
section section section section section section section
4696 4696 4696 4696 4696 4696 4696
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Canada............................. 26% 27% 17% 27% 33% 30% 31%
China.............................. 200% 143% 200% 103% 121% 200% 200%
Mexico............................. 38% 27% 45% 0% 0% 100% 39%
South Korea........................ 47% 49% 44% 58% 0% 100% 35%
Germany............................ 9% 30% 0% 0% 0% 35% 0%
Taiwan............................. 100% 100% 100% 51% 53% 100% 69%
India.............................. 100% 100% 100% 100% 38% 100% 46%
Vietnam............................ 200% 200% 200% 200% 200% 200% 200%
Brazil............................. 55% 56% 49% 57% 29% 57% 30%
Japan.............................. 29% 29% 29% 34% 0% 37% 0%
Italy.............................. 0% 0% 0% 0% 0% 77% 0%
Thailand........................... 65% 38% 72% 26% 23% 100% 28%
Turkey............................. 50% 45% 57% 100% 32% 100% 41%
France............................. 0% 6% 0% 0% 0% 19% 0%
Spain.............................. 0% 0% 22% 35% 0% 61% 9%
United Kingdom..................... 0% 28% 0% 0% 0% 37% 0%
Netherlands........................ 26% 27% 0% 0% 11% 34% 7%
Russia............................. 200% 200% 200% 200% 200% 0% 0%
Austria............................ 26% 29% 0% 0% 0% 39% 0%
Colombia........................... 32% 32% 32% 0% 0% 100% 0%
Israel............................. 0% 0% 0% 0% 0% 37% 0%
Hungary............................ 33% 28% 33% 31% 0% 100% 39%
Malaysia........................... 71% 40% 100% 33% 100% 100% 100%
Poland............................. 39% 44% 39% 45% 51% 67% 52%
Cambodia........................... 66% 0% 66% 68% 0% 0% 0%
Any other country.................. 50% 40% 55% 48% 69% 100% 37%
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``(2) Subsequent application.--
``(A) In general.--For purposes of the 36-month