President Trump has issued a new executive order focusing on so-called “Buy American, Hire American” policies. Making the announcement at the Snap-On Tools plant in Kenosha, Wisconsin, the President’s order directs various federal agencies to produce reports and recommendations on government procurement policies, with the goal of increasing domestic employment and production.
The Executive Order (found here) covers two broad areas of government policy: numerous “Buy American” laws and regulations, which set requirements that materials purchased by the government – say, steel for building a bridge – give preference to US domestic producers; and “Hire American,” which aim to address reported abuses of H1B visas that undermine high-skilled domestic labor.
President Trump has issued a new executive order focusing on international cheaters, who do not pay their debts due to dumping penalties. The order targets the problem of unpaid special customs duties known as “Countervailing Duties” (CVD), levied on products from companies found guilty by an “anti-dumping” investigation.
First to the jargon: “Dumping” refers to a type of predatory trade practice. In its simplest form, it amounts to a company selling a product in a foreign market for less than it costs to make it. In theory, the goal of “dumping” is to drive down the price, and in doing so, muscle out smaller, weaker competition in order to later establish a monopoly status on that market. Under the rules of the World Trade Organization, dumping is a prohibited practice, and countries are permitted to levy special taxes on goods found to be unfairly dumped in their market in order to rebalance the price level. These tariffs are called “Countervailing Duties”, abbreviated as CVD.