The Trade Act of 1974 (Public Law 93–618, codified at 19 U.S.C. ch. 12) is a significant piece of legislation enacted by the U.S. Congress. It was signed into law by President Gerald Ford on January 3, 1975, to promote an open, non-discriminatory world economic system. The Act was created to solve the problem of the President lacking sufficient authority to negotiate trade agreements, particularly for the Tokyo Round of multilateral trade negotiations under the General Agreement on Tariffs and Trade (GATT).
The Act works by granting the President broad authority to negotiate and enforce trade policy. Its key mechanism is the creation of fast track authority (now Trade Promotion Authority), which allows the President to negotiate trade agreements that Congress can only approve or disapprove without amendment or filibuster. Title II, Section 201 (19 U.S.C. § 2251 et seq.) authorizes the President to impose temporary "safeguard" measures, consistent with GATT Article XIX, against increased imports that cause serious injury to domestic industries. Crucially, Title III, Section 301 (19 U.S.C. § 2411 et seq.) grants the United States Trade Representative (USTR) the power to investigate and take retaliatory action, such as imposing tariffs, against foreign countries engaging in unfair trade practices like intellectual property theft.
The Act connects directly to the Generalized System of Tariff Preferences (GSP), which it authorized to grant preferential treatment to developing countries. While the Act's original authority expired in 1982, it has been subsequently extended and amended. The core mechanism of Section 301 has remained, and it has been prominently used in recent years to address trade practices by countries like China.