Trade Enforcement Could Get Funding Boost Under Trump Proposal

International Trade Daily™ provides rapid, reliable notification of the most significant developments affecting U.S. trade and international business policy, as well as the policies of major U.S....

By Rossella Brevetti

President Donald Trump’s budget proposal asked for $9.8 billion to fund the Commerce Department, a $546 million—or 6 percent—increase over levels enacted in fiscal year 2017, according to budget documents.

The fiscal 2019 budget request includes $440 million for Commerce’s International Trade Administration (ITA), which leads Commerce’s export and investment programs and also plays a key role in enforcing U.S. trade laws. In FY 2019, Commerce’s ITA will boost trade enforcement and compliance but will eliminate or reduce lower-priority functions and activities, Commerce said.

The budget proposal would provide slightly more than $90 million for ITA’s Enforcement and Compliance (E&C) unit.

“This would allow ITA to conduct robust investigations into alleged trade violations, aggressively advocate for U.S. businesses facing tariff and non-tariff barriers abroad, and increase the capacity to closely review proposed foreign investments in U.S. businesses,” according to budget documents. The ITA’s Enforcement and Compliance unit received $85.5 million in FY 2017, according to a Commerce spokesman.

Some $3.2 million of new resources would be used for national security reviews by the Committee on Foreign Investment in the United States (CFIUS), as well as to support safeguard investigations on surging imports and Section 232 cases, which examine the effect of imports on national security. Other new resources would enhance the Enforcement and Compliance (E&C) unit’s ability to help U.S. manufacturers through self-initiation of anti-dumping and countervailing duty investigations, Commerce said.

Stricter enforcement of U.S. trade laws is a key Trump administration goal. In the Trump administration’s first year, Commerce has already launched almost 60 percent more anti-dumping and countervailing duty investigations than in the previous year, according to the budget request.

Commerce’s broad mission includes enforcing U.S. trade laws and working with distressed communities to spur economic development.

Further, the proposal seeks $121 million for Commerce’s Bureau of Industry and Security, representing an increase of $7.1 million. The funding would augment efforts to protect national security and safeguard U.S. technology by preventing illegal exports of sensitive products while facilitating secure trade with U.S. allies and close partners.

The funding boost would help ensure that the agency can conduct comprehensive reviews of investment activities to protect against foreign control of critical U.S. businesses, and to complete investigations related to the U.S. defense industrial base as well as on the impacts imports may have on U.S. national security, Commerce said.

Commerce’s broad mission includes enforcing U.S. trade laws and working with distressed communities to spur economic development.

Eliminate Duplication

The budget request would revive a proposal to cut the Economic Development Administration, which the administration said duplicates other federal programs. Elimination of the agency would save approximately $300 million from Commerce’s 2017 enacted funding level.

The proposal would end federal funding for the Manufacturing Extension Partnership program, which subsidizes up to half the cost of state centers providing consulting services to small and medium-sized manufacturers. This would result in $125 million in savings, according to the budget documents.

For FY 2018, the president’s request for Commerce was $7.8 billion, which was $1.4 billion below the 2017 enacted level of $9.2 billion.

Commerce funding for FY 2018 has not been settled. The enactment of a bipartisan budget agreement as part of the six-week continuing resolution sets the stage for the Senate, House, and administration to complete the FY 2018 appropriations process, a Senate Appropriations Committee spokesman told Bloomberg Law.

ITC Funds

In other budget news, the International Trade Commission, an independent federal agency with investigative responsibilities on trade, requested $97.5 million to support its authorized operations in FY 2019. Under the 1974 Trade Act, budget estimates for the ITC are transmitted to Congress without revision by the president.

The ITC investigates whether dumped and/or subsidized imports injure a domestic industry. Other ITC functions include providing independent analysis and information on tariffs, trade, and competitiveness and maintaining the U.S. tariff schedule.

Sen. Mike Enzi (R-Wyo.), chairman of the Senate Budget Committee, said the budget proposal is an important step in the 2019 budget process, but is just a first step. The Senate Budget Committee will hold a hearing on the president’s FY 2019 budget proposal on Feb. 13.

To contact the reporter on this story: Rossella Brevetti in Washington at RBrevetti@bloomberglaw.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bloomberglaw.com

Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.

Try International Trade Daily