On March 31, 2017, President Trump signed two Executive Orders (EO) aimed at the enforcement of the collection of antidumping and countervailing duties for unfair trade practices and at the evaluation of significant trade deficits with U.S. trading partners. These EOs are a clear indication that trade, as promised throughout the campaign, will continue to be a top priority of the Trump presidency.
The new Enhanced AD/CVD Collection EO does not appear to change or add to the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA) that President Obama signed into law but signals that trade issues will continue to remain a high priority for both Democrats and Republicans. For example, Section 115 of TFTEA already directed “U.S. Customs and Border Protection to adjust bond amounts for importers, including new importers and nonresident importers, based on risk assessments of such importers conducted by U.S. Customs and Border Protection, in order to protect the revenue of the Federal Government.”
The Enhanced AD/CVD Collection EO signed by President Trump requests that the Secretary of the Treasury, the Secretary of Commerce, the United States Trade Representative, and the U.S. Attorney General provide additional input to the Secretary of Homeland Security to develop and implement a strategy and plan for combating violations of United States trade and customs laws. Thus, it signals broader authority and stepped up enforcement of potential trade violations among the Federal Agencies.
President Trump’s EO on Trade Deficits calls for the Secretary of Commerce and the United States Trade Representative (USTR) to issue a report in consultation with various governmental and non-governmental stakeholders, including manufacturers, workers, consumers, service providers, farmers, and ranchers. President Trump’s EO targets foreign trading partners with which U.S. had a significant trade deficit in 2016. (Deficits were recorded, in billions of dollars, with China ($347.0), European Union ($146.3), Japan ($68.9), Germany ($64.9), Mexico ($63.2), Ireland ($35.9), Italy ($28.5), South Korea ($27.7), Malaysia ($24.8), India ($24.3), Thailand ($18.9), France ($15.8), Switzerland ($13.7), Taiwan ($13.3), Indonesia ($13.2), and Canada ($11.2). The report seeks to address potential causes and to find ways to adjust the imbalance of the trade deficits.
The EOs also appear to be indication that President Trump plans to stick to his other campaign promises of a potential border adjustment tax, the implementation of across-the-board tariffs, and a reevaluation of the United States’ trade obligations under its various agreements.
With the issuance of the EOs the Trump Administration appears to be signaling that it now is prepared to move forward on its trade agenda on many fronts. Every U.S. business and every supply chain is likely to be affected, for better or worse, by these developments. We expect much more to come, and soon. For additional information, please contact Michael Holton or Joe Orlet.