United States: President Trump Issues Two Executive Orders On Trade And Customs Enforcement, And Trade Deficits

President Trump signed two EOs addressing trade on Friday, March 31: one addressing trade and customs enforcement, including the collection of antidumping and countervailing duties (AD/CVD), and a second requesting an omnibus report on significant trade deficits. While the EOs represent another of the administration's major forays into trade, they set the table for increased enforcement of U.S. trade laws and scrutiny of U.S. trading partners.

Trade and Customs Enforcement EO

The first EO, titled "Establishing Enhanced Collection and Enforcement of Antidumping and Countervailing Duties and Violations of Trade and Customs Laws," addresses a number of trade enforcement issues that have been the focus of President Trump's trade policy. First, the EO addresses the undercollection of AD/CVD. Second, the EO instructs DHS and Customs and Border Protection (CBP) to develop a plan to combat violations of trade and customs laws and prevent the importation of inadmissible merchandise, as well as to increase intellectual property rights protections, which was also addressed in the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). Third, the EO calls on the DOJ, in consultation with DHS, to prioritize the prosecution of significant trade law offenses.

Trade Remedy Evasion

Citing $2.3 billion in uncollected AD/CVD as of May 2015, the EO instructs DHS to develop enhanced bonding requirements for certain importers and to make other improvements to the enforcement of U.S. trade remedy laws. The undercollection of AD/CVD has been the subject of congressional interest over the past decade and has resulted in the enactment of new trade remedy evasion provisions under Title IV of TFTEA, which is more commonly referred to as the "Enforce & Protect Act." We expect that the plan will involve provisions from TFTEA requiring CBP to implement a new procedure to investigate allegations of trade remedy evasion. In addition, CBP will likely rely on Section 115 of TFTEA, which requires CBP to establish bonding requirements for importers based on CBP risk assessments.

The EO calls on DHS and the Department of Commerce, among others, to develop a plan within 90 days to provide security through bonds and other enforcement measures for importers who are subject to AD/CVD and who (i) are new importers, (ii) have not fully paid applicable AD/CVD or (iii) have failed to timely pay AD/CVD. While it is unclear what the new additional bonding requirements will look like, there is some historical precedent for enhanced bonding requirements.

CBP attempted to apply similar bonding requirements in the mid-2000s, but suffered setbacks at the U.S. Court of International Trade and the World Trade Organization (WTO). In particular, CBP imposed enhanced bonding requirements on shrimp subject to trade remedy orders starting in 2005. Under the program, importers were required to post a bond—in addition to tender cash deposits for estimated AD/CVD—that represented approximately double the amount of AD/CVD cash deposit due on the entry. The U.S. Court of International Trade, however, found that the requirements violated U.S. law. The WTO also found that the enhanced bonding requirements violated the United States' obligations under the WTO.

The EO also calls for DHS to identify other enforcement measures that could be part of the plan to address trade remedy evasion. We expect that DHS will heavily involve the Trade Remedy Enforcement Division within CBP's Office of International Trade to develop this part of the plan. We expect that the plan will use existing authority for the division to investigate allegations of evasion of AD/CVD and issue Trade Alerts directing a closer inspection of merchandise by port personnel. The plan may also involve the new, judicially reviewable evasion petition procedure that CBP must undertake should it receive such petitions from interested parties, although that process has been criticized by domestic industry.

Increased Enforcement of Violations of Trade and Customs Laws

The EO also addresses increased enforcement of violations of U.S. trade and customs laws, with a focus on the importation of inadmissible and counterfeit merchandise. The EO directs DHS to develop a strategy for combating violations of trade and customs laws and "for enabling interdiction and disposal, including through methods other than seizure" of inadmissible merchandise.

With respect to intellectual property rights, the EO requests that DHS take "all appropriate steps, including rulemaking" to ensure that CBP can share with rights holders "any information necessary to determine whether there has been an IPR infringement or violation." CBP already has the authority to share information about counterfeit and piratical products with rights holders after seizure, and it also amended its regulations in 2015 to promote the sharing of information regarding suspect counterfeit marks with trademark owners prior to seizure [read more here]. Further, TFTEA expanded CBP's authority to share information prior to seizure beyond counterfeit trademarks to piratical copyrights and circumvention devices that are suspected of infringing the Digital Millennium Copyright Act. CBP previously indicated that these regulatory changes are under way, and the EO may expedite the issuance of those regulations. The EO's portion on intellectual property rights also directs DHS to ensure that CBP can share with rights holders "any information regarding merchandise voluntarily abandoned" prior to seizure if CBP reasonably believes that the successful importation of the merchandise would have violated U.S. trade laws.

Since the issuance of the EO, CBP has published a fact sheet indicating that it is leading DHS's efforts to implement the provisions set forth in the EO and that, within 90 days, CBP will develop implementation plans (i) to provide security for AD/CVD liability through bonds; and (ii) to enable the interdiction and disposal of violative goods, with the ability to share information regarding voluntarily abandoned merchandise with intellectual property rights owners.

Priority Prosecution for Trade Law Violations

Finally, the EO orders DOJ and DHS to prioritize the prosecution of violations of trade laws. As a result of the EO, we would expect to see an increased number of cases, both criminal and civil, for U.S. trade and customs law violations, especially as it relates to the evasion of trade remedy orders and the importation of potentially counterfeit goods. Importers should expect to see increased civil, and possibly criminal, prosecutions from an emboldened CBP, especially with respect to customs and trade offenses in Titles 18 and 19 of the U.S. Code.

Trade Deficit Report

The second EO requests a country-by-country report on the causes of U.S. trade deficits. The EO asserts that the United States' annual trade deficit in goods exceeds $700 billion and that the overall trade deficit exceeded $500 billion in 2016. The EO highlights the need for "free and fair trade," the enforcement of trade laws and economic growth. The EO also asserts that the United States has not obtained the full scope of benefits anticipated from numerous international trade agreements and participation in the WTO.

Specifically, the EO requires that, within 90 days, the Secretary of Commerce and the United States Trade Representative must submit a report to the President that will identify foreign trading partners with which the United States had a significant trade deficit in goods in 2016. The report must assess the major causes of the trade deficit, such as differential tariffs, non-tariff barriers, dumping, government subsidization, intellectual property theft, and denial of worker rights and labor standards. The report must also make a determination as to whether the identified trading partner is 'imposing unequal burdens" or "unfairly discriminating against" the commerce of the United States. Additionally, the report must assess the effects of the identified trade relationships on the production capacity of the manufacturing and defense industries, as well as employment and wage growth in the United States. Lastly, the report must identify imports and trade practices that may be impairing the national security of the United States. President Trump could use the data from this report to address trade deficits with U.S. trading partners.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions