Updated May 14, 2024
Trade Adjustment Assistance for Firms
The Trade Adjustment Assistance for Firms (TAAF)
Congress last reauthorized TAAF and other TAA programs
program helps U.S. firms impacted by import competition
in the Trade Adjustment Assistance Reauthorization Act of
to improve their global competitiveness. TAAF is
2015 (TAARA, Title IV, P.L. 114-27), in conjunction with
administered by the U.S. Department of Commerce’s
the latest TPA reauthorization. TPA expired in July 2021,
Economic Development Administration (EDA). On July 1,
and, to date, the Biden Administration has not sought
2022, TAAF termination provisions took effect, meaning
reauthorization.
EDA cannot accept new petitions for TAAF but may
TAARA included “sunset provisions” for TAAF, which
continue to assist firms that submitted a petition prior to the
program’s
ended TGAAA’s expanded measures as of July 1, 2021.
expiration.
TAARA termination provisions took effect on July 1, 2022,
Historically, Congress has reauthorized and expanded
meaning that firms can no longer submit new petitions for
Trade Adjustment Assistance (TAA) programs, including
TAAF, but firms that filed a petition by June 30, 2022 can
TAAF and a larger program for workers (see text box), in
continue to receive assistance.
tandem with trade liberalization legislation, such as for free
trade agreements (FTAs). Congress has also reauthorized
TAAF Overview
TAA programs during periods of high U.S. unemployment.
EDA provides TAAF funding to 11 regional Trade
While most of the policy discussions have focused on the
Adjustment Assistance Centers (TAACs), which provide
TAA for Workers program, the 118th Congress may
technical assistance to firms in the 50 states, the District of
consider whether or not to reauthorize TAAF, or whether to
Columbia, and the Commonwealth of Puerto Rico. EDA
make policy changes to the TAAF program.
does not directly provide funds to firms. The following
entities may apply to operate a TAAC: (1) universities or
affiliated organizations; (2) states or local governments; or
Trade Adjustment Assistance (TAA) for Workers
(3) nonprofit organizations.
provides workforce services and other benefits for trade-
affected workers. It is administered by the U.S. Department of
Phase 1: Certification. TAACs worked with firms at no
Labor (DOL). Under sunset and termination provisions in the
cost to complete and submit their petitions to EDA to be
Trade Adjustment Assistance Reauthorization Act of 2015,
certified as a trade-impacted firm. Most firms that applied
the program began a phaseout on July 1, 2022. Workers who
for TAAF certification have been from the manufacturing
were receiving benefits prior to the termination may continue
sector. EDA had to certify that firms met three conditions:
to do so, but new worker groups are ineligible for the
program. TAA for Workers has continued to receive funding
• Real or threatened negative employment impacts for “a
to support legacy participants.
significant number or proportion of workers”;
•
Background
Decreases to sales and/or production during a specified
timeframe; and
Congress first authorized TAA programs in the Trade
•
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,
Phase 2: Recovery Planning. Once EDA certifies a firm,
quotas, or duties. Congress reauthorized and expanded
the firm works with TAAC staff to develop a business
TAA programs in the Trade Act of 1974 (P.L. 93-618),
recovery plan (“adjustment proposal,” or AP) for approval
which also created “fast track trade negotiating
by EDA. Firms have two years from certification to submit
authority”—expedited legislative consideration of trade
an AP. TAAF covers 75% of phase 2 costs.
agreements, now referred to as Trade Promotion Authority
(TPA).
Phase 3: AP Implementation. Once EDA approves a
firm’s AP, TAACs and firms jointly select and contract
Under the Trade and Globalization Adjustment Assistance
with consultants to assist with AP implementation. Firms
Act of 2009 (TGAAA, part of P.L. 111-5, the American
have up to five years to implement projects, unless EDA
Recovery and Reinvestment Act), Congress expanded
approves an extension. TAAF covers 50%-75% of costs
TAAF through provisions such as (1) the inclusion of
(up to $75,000) to implement APs, depending on the
service-sector firms to reflect their increased role in the
proposed project costs. Examples of AP projects include
U.S. economy, and (2) extended timeframes for evaluating
improvements to marketing/sales, production processes,
negative impacts of import competition on firm sales and/or
financial systems, management, and information systems.
production.
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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
TAAF reauthorization and trade liberalization.

2018
2019
2020
2021
Members in the 118th Congress may consider whether or
not to renew TAAF and other TAA programs through bills
Appropriations
$13.0
$13.0
$13.0
$13.5
such as H.R. 4276, which would also reauthorize the
(mil ions)
following trade measures that expired on December 31,
2020: (1) the Generalized System of Preferences (GSP),
APs Approved
98
66
64
97
which provides nonreciprocal, duty-free access for certain
Active Firms
530
538
498
538
goods from eligible developing countries, and (2)
Miscellaneous Tariff Bills (MTBs) under the American
Avg. Firm Sales
$12.5
$11.1
$10.1
$18.7
Manufacturing Competitiveness Act of 2016 (P.L. 114-
(mil ions)
159), which temporarily suspend/reduce tariffs on certain
Avg. Firm
67
63
57
59
imports.
Employees
During the 117th Congress, some Members expressed
opposition to reauthorizing TAA without consideration of
Source: Department of Commerce EDA, annual TAAF reports.
TPA. Some Members have criticized the Biden
Note: EDA considers a firm “active” if it has an approved AP, has
Administration’s overall trade policy approach, particularly
not completed al projects in its AP, and remains engaged in the
what they describe as a lack of interest in negotiating with
TAAF program.
U.S. trading partners to secure new market access and tariff
For FY2025, EDA has requested $13.5 million in funding
cuts. Some Members have also expressed concerns over
to continue providing technical assistance to firms already
executive trade agreements that the Administration has
in the TAAF program. EDA stated that it expects a need for
indicated do not require congressional approval (e.g., the
continued appropriations through FY2029 to serve firms
March 2023 U.S.-Japan Critical Minerals Agreement,
currently in the program. In a previous budget request,
ongoing negotiations for the Indo-Pacific Economic
EDA noted that unless Congress reauthorizes TAAF, the
Framework for Prosperity). Administration officials have
“inability to accept new firms into the program will
commented that a new model of trade policy is necessary to
ultimately result in program termination.”
promote “equitable economic growth” and build a broader
base of U.S. domestic support for global trade.
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
SMEs facing challenges, such as those operated by the
annual reports on TAAF to Congress. TGAAA also
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
Changes to TAAF. If Congress chooses to reauthorize
mandated by TGAAA improved operations and led to
TAAF, Members may consider making changes to the
increased TAAF participation. GAO found that a firm’s
program. For example, while TAAF has focused on firms
participation in TAAF was statistically associated with
that can demonstrate harm from import competition,
increased sales. At the same time, GAO recommended
improvements to EDA’s performance measures and data
Congress could consider measures to identify or support
firms before they experience negative impacts. Congress
collection. As of 2021, EDA had implemented all of GAO’s
could consider requiring EDA to prepare a capacity-
recommendations.
building plan to assist industries or regions that the United
In its FY2021 TAAF annual report (the latest available),
States International Trade Commission (USITC) identifies
EDA stated that self-reported TAAF participant data
as potentially vulnerable or likely to experience a negative
collected from FY2010-2021 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
•
from changes related to technology, the growth of global
For the two years following program completion,
supply chains, labor productivity, consumer preferences,
average sales increased by 11%, and average
and other domestic and global economic factors. In the
employment increased by 18%.
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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https://crsreports.congress.gov | IF12430 · VERSION 7 · UPDATED

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