James introduces plan to shield Michigan from tariffs

Rep. John James on Tuesday introduced legislation to shield Michigan from the effect of tariffs in the ongoing trade war with Canada, while still preserving them as a tool to protect American jobs.

Under his plan, the Tariff Relief for American Development and Employment Act (also called the TRADE Act for short), the U.S. would set aside a portion of tariff revenue into funds meant to help reshore jobs and provide temporary relief to businesses that can show they have suffered real economic harm.

"Michigan is disproportionally affected by the trade war, so it's reasonable to use tariff revenue to reduce the effect on Michigan businesses and workers," said James, R-Shelby Township. "Our country needs to push back on unfair trade practices, but states like Michigan should not have to shoulder that burden alone."

Michigan has lost around 300,000 manufacturing jobs since the year 2000, and many of those jobs went to Canada. The current situation with Canada is not reciprocal, James said. Adding to the problem is that Canada is allowing China to dump auto parts into the Canadian market, which then find their way into U.S. supply chains, as a way of avoiding tariffs on Chinese products.

James has talked with the U.S. trade representative about resolving the trade dispute, and he has publicly called for Canada and the United States to return to the negotiating table.

"I fought with Canadians in Iraq. We have a deep and abiding bond that will not extinguish. I'm committed to making sure we continue to improve and deepen our relationships, and making sure our differences are resolved in a civil manner, quickly," James said. "Our countries need to work out a reciprocal, fair, and mutually beneficial arrangement so we can bring back jobs and protect our industry."

Before serving in Congress, James served as CEO of his family's shipping and logistics firm, so he deeply understands cross-border trade and the auto parts industry.

The TRADE Act will help prevent U.S. companies from being forced to cut production, delay investment, or eliminate jobs solely because of extra tariff-related costs, James said. It will also reward businesses that keep jobs here, expand domestic production, and reshore supply chains.

There are two main parts to the plan. The bill establishes a Tariff Impact Relief Program, which dedicates a portion of the tariff revenue to strengthening United States domestic productive capacity.

It also establishes a Tariff Relief for American Development and Employment Fund (TRADE Fund) to help offset economic harm due to tariffs (and retaliatory tariffs) by providing targeted, temporary assistance to U.S. businesses that demonstrate actual tariff-related economic injury.

To qualify for assistance, recipients would have to agree to several "Keep It in America" conditions: keep production in the United States, maintain domestic employment numbers (aside from ordinary business fluctuations), and spend funds on things like working capital, payroll, domestic investment, domestic sourcing, training, or productivity.

The legislation includes guardrails to prevent abuse and ensure funds are being used to protect American jobs. For example, assistance may not be used for stock buybacks, to pay dividends, or to increase executive compensation. The funds likewise cannot be used to relocate production to a foreign country or to acquire a competitor, unless the Secretary of Commerce determines that the acquisition meaningfully expands domestic production capacity.

The legislation also requires the Secretary of Commerce to establish clawback provisions to recover money from fraud and violations of the domestic production requirements. Recipients will have to repay the assistance, in whole or in part, if they materially violate any of the requirements.

H.R. 10759 was referred to the Committee on Financial Services and to the Committee on Ways and Means.

James represents Michigan's 10th Congressional District, which includes portions of Oakland and Macomb counties.