April 3, 2017

Huge Week In Trade Policy: Enforcement Executive Orders, China MTE States Review, ITC Copper Announcement

Last Friday, President Donald Trump signed two executive orders dealing with trade policy. 

The first order directs the U.S. Commerce Department and the U.S. Trade Representative (USTR) to conduct a “country-by-country, product-by-product accounting of the reasons for the imbalance.” The Commerce/USTR report will focus particularly on countries with which the United States runs a trade deficit. It will detail the major causes of trade deficits by country and product, including the extent to which the deficit is due to trade cheating or other inappropriate behavior; free trade agreements that have not lived up to their forecasted benefits; lax U.S. enforcement; currency manipulation or misalignment; World Trade Organization (WTO) constraints; systematic overcapacity; and other issues. The intent of the order is to use the findings of this report to provide the basis for appropriate trade enforcement and action. 

The second order is “aimed at increasing the collection of duties from countries whose companies American officials believe are selling products in the United States below their cost of production.” It directs the Department of Homeland Security and other agencies to improve the collection of antidumping duty (AD) and countervailing duty (CVD) orders at the border by improving bonding requirements and to take other measures to address risk assessments. This order responds to the findings of a July 2016 General Accounting Office report that found $2.3 billion in AD and CVD duties went uncollected through May 2015, citing inadequate bonding and risk assessment procedures. 

National Trade Council Director Peter Navarro argued that, with the orders, “For the first time, we’re looking comprehensively at the source of what has been a large and persistent trade deficit that has contributed to job losses, the loss of our manufacturing base and other things.” Click here to read MSCI President and CEO Bob Weidner’s February op-ed calling for an “innovative, integrated and comprehensive” approach to trade enforcement and click here to read the orders. 

In other trade-related news last week:

  • The USTR released its annual report on international trade barriers around the world. The report makes it clear, following on the USTR’s earlier release of the 2017 Trade Policy Agenda, that the Trump administration will focus on robust trade enforcement and making sure other countries are playing by the rules to which they have committed. The report also highlights the need to address excess steel and aluminum production capacity. Click here to see MSCI’s statement on the previously released Trade Policy Agenda.
  • The U.S. Commerce Department announced that it will review whether China should be considered a “market economy” under U.S. law. As a member of the Manufacturers for Trade Enforcement coalition, the Metals Service Center Institute (MSCI) opposes granting market economy status to China because it would reduce the United States’ ability to address China’s unfair trade practices. According to Global Finance, this order “lays the groundwork” for keeping non-market economy status for China—MSCI’s preferred policy—in place.
  • At a U.S. House Steel Caucus hearing, Rep. Marcy Kaptur (D-OH) called for “aid to help the U.S. steel sector deal with the market-depressing effects of China's excess production capacity.”
  • The International Trade Commission ruled unanimously that there is evidence of dumping of phosphor copper imports from Korea.