June 16, 2023
Trade Adjustment Assistance for Firms
The Trade Adjustment Assistance for Firms (TAAF)
negative impacts of import competition on firm sales and/or
program helps U.S. firms impacted by import competition
production.
to improve their global competitiveness. TAAF is
Congress last reauthorized TAAF and other TAA programs
administered by the U.S. Department of Commerce’s
in the Trade Adjustment Assistance Reauthorization Act of
Economic Development Administration (EDA). On July 1,
2015 (TAARA, Title IV, P.L. 114-27), in conjunction with
2022, TAAF termination provisions took effect, meaning
the latest TPA reauthorization. TPA expired in July 2021,
EDA cannot accept new petitions for TAAF but may
and, to date, the Biden Administration has not sought
continue to assist firms that submitted a petition prior to the
program’s
reauthorization.
expiration.
TAARA included “sunset provisions” for TAAF, which
Historically, Congress has reauthorized and expanded
ended TGAAA’s expanded measures as of July 1, 2021.
Trade Adjustment Assistance (TAA) programs, including
TAARA termination provisions took effect on July 1, 2022,
TAAF and a larger program for workers (see textbox), in
meaning that firms can no longer submit new petitions for
tandem with trade liberalization legislation, such as for free
TAAF, but firms that filed a petition by June 30, 2022 can
trade agreements (FTAs). Congress has also reauthorized
continue to receive assistance.
TAA programs during periods of high U.S. unemployment.
While most of the policy discussions have focused on the
TAAF Overview
TAA for Workers program, the 118th Congress may
EDA provides TAAF funding to 11 regional Trade
consider whether or not to reauthorize TAAF in the absence
Adjustment Assistance Centers (TAACs), which provide
of major trade-related legislation, or whether to make
technical assistance to firms in the 50 states, the District of
policy changes to the TAAF program.
Columbia, and the Commonwealth of Puerto Rico. EDA
does not directly provide funds to firms. The following
Trade Adjustment Assistance (TAA) for Workers
entities may apply to operate a TAAC: (1) universities or
provides workforce services and other benefits for trade-
affiliated organizations; (2) states or local governments; or
affected workers. It is administered by the U.S. Department of
(3) nonprofit organizations.
Labor (DOL). Under sunset and termination provisions in the
Phase 1: Certification. TAACs worked with firms at no
Trade Adjustment Assistance Reauthorization Act of 2015,
cost to complete and submit their petitions to EDA to be
the program began a phaseout on July 1, 2022. Workers who
certified as a trade-impacted firm. Most firms that applied
were receiving benefits prior to the termination may continue
for TAAF certification have been from the manufacturing
to do so, but new worker groups are ineligible for the
sector. EDA had to certify that firms met three conditions:
program. TAA for Workers has continued to receive funding
to support legacy participants. For FY2024, DOL has
• Real or threatened negative employment impacts for “a
requested $292.9 mil ion for the program.
significant number or proportion of workers”;
Background
• Decreases to sales and/or production during a specified
Congress first authorized TAA programs in the Trade
timeframe; and
Expansion Act of 1962 (P.L. 87-794), as amended. TAA
• Import competition has “contributed importantly” to the
programs were introduced to address domestic concerns
negative impacts on employment and sales and/or
about the localized negative impacts of trade liberalization
production.
without using trade protectionist measures such as tariffs,
quotas, or duties. Congress reauthorized and expanded
Phase 2: Recovery Planning. Once EDA certifies a firm,
TAA programs in the Trade Act of 1974 (P.L. 93-618),
the firm works with TAAC staff to develop a business
which also created “fast track trade negotiating
recovery plan (“adjustment proposal,” or AP) for approval
authority”—expedited legislative consideration of trade
by EDA. Firms have two years from certification to submit
agreements, now referred to as Trade Promotion Authority
an AP. TAAF covers 75% of phase 2 costs.
(TPA).
Phase 3: AP Implementation. Once EDA approves a
Under the Trade and Globalization Adjustment Assistance
firm’s AP, TAACs and firms jointly select and contract
Act of 2009 (TGAAA, part of P.L. 111-5, the American
with consultants to assist with AP implementation. Firms
Recovery and Reinvestment Act), Congress expanded
have up to five years to implement projects, unless EDA
TAAF through provisions such as (1) the inclusion of
approves an extension. TAAF covers 50-75% of costs (up
service-sector firms to reflect their increased role in the
to $75,000) to implement APs, depending on the proposed
U.S. economy, and (2) extended timeframes for evaluating
project costs. Examples of AP projects include
improvements to marketing/sales, production processes,
financial systems, management, and information systems.
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Trade Adjustment Assistance for Firms
According to EDA, firms receive an average of 57 months
concerns about costs and duplication with other government
of TAAF benefits from the time of petition certification
programs.
until program completion.
Issues for Congress
Table 1. TAAF Program and Participant Information
Members of Congress might consider the following issues

2018
2019
2020
2021
as part of the debate over whether or not to reauthorize
and/or make changes to TAAF:
Appropriations
$13.0
$13.0
$13.0
$13.5
(mil ions)
The relationship between TAA and trade liberalization.
During the 117th Congress, some Members called for
APs Approved
98
66
64
97
reauthorizing TAA programs, particularly for workers,
Active Firms
530
538
498
538
while others expressed opposition to reauthorizing TAA
without consideration of TPA. Some Members have
Avg, Firm Sales
$12.5
$11.1
$10.1
$18.7
criticized the Biden Administration’s overall trade policy
(mil ions)
approach, particularly what they describe as a lack of
Avg. Firm
67
63
57
59
interest in negotiating with U.S. trading partners to secure
Employees
new market access and tariff cuts. Some Members have also
expressed concerns over executive trade agreements that
Source: Department of Commerce EDA, annual TAAF reports.
the Administration has indicated do not require
Notes: EDA considers a firm “active” if it has an approved AP, has
congressional approval (e.g., the March 2023 U.S.-Japan
not completed al projects in its AP, and remains engaged in the
critical minerals agreement, ongoing negotiations for the
TAAF program.
Indo-Pacific Economic Framework for Prosperity).
Administration officials have commented that a new model
For FY2024, EDA has requested $13 million in funding to
of trade policy is necessary to promote “equitable economic
continue providing technical assistance to firms already in
growth”
the TAAF program. EDA stated that it expects a need for
and build a broader base of U.S. domestic support
for global trade. They have not commented on whether
continued appropriations through FY2029 to serve firms
TAA is part of this new model. Members in the 118th
currently in the program. EDA noted that unless Congress
reauthorizes TAAF, the “inability to accept new firms into
Congress may consider whether or not to renew TAAF and
other TAA programs without TPA, or as part of a trade
the program will ultimately result in program termination.”
agenda that does not include market access/tariff cuts.
Impact of TAAF
Streamlining programs. Members might consider
The 2009 TGAAA included additional oversight and
streamlining TAAF with other federal programs that assist
evaluation criteria for TAAF and required EDA to submit
annual reports on TAAF to Congress. TGAAA also
SMEs facing challenges, such as those operated by the
Small Business Administration (SBA). For more on SBA
mandated the Government Accountability Office (GAO) to
programs see CRS Report RL33243, Small Business
conduct a comprehensive evaluation of the TAAF program.
Administration: A Primer on Programs and Funding.
GAO published this report in 2012, noting that changes
mandated by TGAAA improved operations and led to
Changes to TAAF. If Congress chooses to reauthorize
increased TAAF participation. GAO found that a firm’s
TAAF, Members may consider making changes to the
participation in TAAF was statistically associated with
program. For example, while TAAF has focused on firms
increased sales. At the same time, GAO recommended
that can demonstrate harm from import competition,
improvements to EDA’s performance measures and data
Congress could consider measures to identify or support
collection. As of 2021, EDA had implemented all of GAO’s
firms before they experience negative impacts. Congress
recommendations.
could consider requiring EDA to prepare a capacity-
building plan to assist industries or regions that the United
In its FY2021 TAAF annual report, EDA stated that self-
States International Trade Commission (USITC) identifies
reported TAAF participant data collected from FY2010-
as potentially vulnerable or likely to experience a negative
2021 shows that:
impact from implementation of trade liberalizing measures.
• From certification to program completion, firms’
Members may also consider whether or not firms affected
average sales increased by 30%, and average
by factors other than import competition should qualify for
employment decreased by 4%.
TAAF. It is difficult to disentangle trade-related impacts
• For the two years following program completion,
from changes related to technology, the growth of global
average sales increased by 11%, and average
supply chains, labor productivity, consumer preferences,
employment increased by 18%.
and other domestic and global economic factors. In the
117th Congress, H.R. 5289 would have expanded TAAF
Supporters of TAAF have argued that the program has a
eligibility to firms whose exports declined due to foreign
significant and positive impact on small- and medium-sized
tariffs imposed in retaliation for U.S. tariff increases under
enterprises (SMEs), particularly manufacturers. Critics have
certain executive authorities.
questioned the program’s efficacy and noted that other
government programs are available to provide similar
Kyla H. Kitamura, Analyst in International Trade and
assistance to firms. Previous Congresses and
Finance
Administrations have considered eliminating TAAF due to
IF12430
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Trade Adjustment Assistance for Firms


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