On Tuesday, March 20, President Trump released his blueprint for an “America First” budget, which indicates that the President intends enhanced focus on trade remedies to encourage US manufacturing and sourcing. The budget proposal signals the importance of providing agencies like the US Department of Commerce with the resources needed to emphasize its enforcement arm – even in the face of considerable cuts to other federal agencies. The March 20 budget proposal suggests an increase to the Commerce Department’s International Trade Administration’s “trade enforcement and compliance functions, including the anti-dumping and countervailing duty investigations, while rescaling the agency’s export promotion and trade analysis activities.”
The Trump Administration has signaled further aggressive action. One example came this month through National Trade Council head Peter Navarro, who intervened in a Commerce antidumping review, suggesting particular margins on Korean oil country tubular goods. Mr. Navarro sent an email to Commerce Secretary Wilbur Ross on March 2, titled “Recommendation for Action.” He encouraged Commerce to apply the “particular market situation” measuring tool to calculate the size of antidumping duties. A further example came through the confirmation hearing of Robert Lighthizer, President Trump’s pick for US Trade Representative and long-time counsel to US producers and petitioners. He testified before Congress this month that he would pursue effective new tools against China for its alleged violations of international trade commitments. Consistent with these comments, the Commerce Department may be under increased pressure to self-initiate investigations into dumping and unfair subsidizing or potential duty invasion through transshipping or referring allegations of false declarations to authorities like the Department of Justice.
Prior to President Trump taking the oath of office, US importers faced increased scrutiny with respect to products subject to trade remedy measures like antidumping and countervailing duties. Specifically, following a US Government Accountability Office published report concluding that US Customs and Border Protection had failed to collect approximately $2.3 billion in antidumping and countervailing duties from 2001 – 2014, Customs announced in August 2016 its focus on the issue and commitment to combating antidumping and countervailing duty evasion. Customs implemented new initiatives and procedures that have had tremendous effects on industries like steel, aluminum, copper, other primary metals, chemicals, textiles, and electronics. US importers have faced increased notices of action for classification and assessment of such entries and risk seizure of imports and significant fines. Further, the 2015 Trade Preferences Extension Act made a number of changes to US antidumping law that permit, for example, the United States to rely on “adverse inferences” and find injury to a domestic industry in trade remedy investigations. National Trade Council head Navarro cited the new powers granted to Commerce under this statute as support for his minimum margin calculation in the Korean oil country tubular goods proceeding.
The stakes are high for companies seeking to evade antidumping and countervailing duties, but moreover, all US importers should be aware of the orders in effect, the range of in-scope merchandise, and the new investigations to come. Such monitoring can be particularly challenging for orders with broad scopes.