Executive Order 13785: Enforcing Antidumping Duties

What the Executive Order Says

Executive Order (EO) 13785 is entitled "Establishing Enhanced Collection and Enforcement of Antidumping and Countervailing Duties and Violations of Trade and Customs Laws" and it has 6 sections.  This EO was originally issued on March 31, 2017.

Section 1

This section defines the policy of the administration.  It notes that there are $2.3 billion of duties owed to the government that are uncollected.  It does not specify whether this is current accounts receivable or if this is just what has been written off as bad debts.  Also, to put it in perspective, compared to the trillions of dollars of imports annually, this is a rounding error.  The section goes on to mandate risk based bonding requirements.

Section 2

This section provides definitions for "importer" and "covered importer".

Section 3

This section directs that the Secretary of Homeland Security provide a plan within 90 days for implementation of risk based bonding requirements on covered importers.

Section 4

This section discusses cracking down on violators of trade and customs laws generally, but specifically with regards to "knock-off" products.  It also promises to share information with rights holders regarding violations that occur.

Section 5

This section directs the Attorney General to give prosecution of trade violations high priority.

Section 6

This section includes the usual fine print to ensure the constitutionality of the EO.

My Commentary

I do not know how much resources were allocated to detecting and pursuing trade violations including those regarding "knock-off" products prior to the issue of this EO.  My opinion is that adding to these resources is not value for money although large corporations who have trademarks and those industries who have been battling with lower priced imports may feel better because of the issuance of this EO.
First, there is a process already for filing for a review of whether something is being dumped on the American market.  If you search in the Federal Register for "antidumping", there are thousands of notices of investigations that are in process and have been performed for specific products.  Of course these are all initiated after the fact once the goods are already released through customs.  Application of duties or penalties on the importer after the conclusion of the investigation is where some or all of the mentioned $2.3 billion comes from.  If the importing company has little or no assets and if the exporting company does not have a presence in the US, then there is nothing that the government can do to collect the money, it just shuts down that importer.  You can see how this might end up in a game of whack-a-mole.  I do not imply that this kind of behavior does not cause harm.  Certainly any anti-competitive behavior can harm small businesses.
Second, focusing enforcement efforts here will likely not yield significant results and if the risk-based methodology that is adapted is overly broad it can result in being a deterrent to trade and could be perceived as a reason for retaliation against US exports by other countries.
Finally, the end result of success with regards to the actions being initiated by this EO will result in higher prices paid by consumers and end users of the goods that end up in the dragnet.  Higher import tariffs mean higher prices.  The argument that would be made is that it will stimulate domestic supply, but in many cases, such as stainless steel pipe and tubing, new production is capital intensive since you have to first build a steel mill.  It may certainly allow domestic production to rise a little, but my opinion is that there have been a lot of costs to be able to get to that point which would outweigh any benefits.