On March 16, 2017, the U.S. Office of Management and Budget released the President's 2018 Budget Blueprint (Budget Blueprint), which provides the Trump administration's preliminary budget outline for 2018. Among other "America First" strategies, the Budget Blueprint proposes to strengthen the International Trade Administration (ITA)'s trade enforcement and compliance functions, as a way of prioritizing "fair and secure trade." ITA is under the purview of the U.S. Department of Commerce (DoC), and is responsible for enforcing U.S. trade laws and ensuring compliance with trade agreements negotiated on behalf of U.S. industry.  Commerce Secretary Wilbur Ross is already on record as indicating that his department will vigorously enforce U.S trade laws.

The immediate manifestation of the "America First" strategies in the area of trade enforcement will likely be experienced by Canadian businesses through the following:

  • AD/CVD enforcement will likely increase — International trade law experts expect "ramped up" use of antidumping and countervailing duty laws by the Trump administration. Strengthening trade enforcement was a central theme in the Senate Finance Committee confirmation hearing of Robert Lighthizer, the U.S. Trade Representative (USTR) nominee, who stated during the confirmation hearing that he intends to bring "as many trade enforcement actions as can be justified under World Trade Organization rules, bilateral trade agreements and U.S. trade remedy laws." 
  • Softwood lumber dispute: negotiation vs. litigation — During the Senate confirmation hearing, USTR Nominee Lighthizer also noted that resolving the Canada-U.S. softwood lumber dispute is "at the top of his list" either through forging a new agreement or via litigation. While the softwood lumber dispute dates back to 1982, the most recent agreement between Canada and the U.S. expired on October 12, 2015. In January 2017, the U.S. International Trade Commission issued the preliminary ruling that Canadian lumber is harming the American industry.

David Emerson, British Columbia's trade envoy to the U.S., has expressed that "B.C., as much of the rest of Canada, is not anxious to take a long, costly damaging (litigation) process." Emerson previously signed the softwood lumber agreement in 2006 that brought about the  fourth Canada-U.S. softwood lumber dispute to an end after costly trade litigation. Whether the U.S. will agree to resolve the dispute without protracted litigation remains unclear.  Unless there is a negotiated resolution, the DoC is slated to announce its preliminary subsidy decision at the end of April and its dumping determination at the end of June. The U.S. will finalize the duties by early 2018, at which point Canada will be in a position to appeal the decisions.

In view of promises of accentuated trade remedy enforcement under the Trump administration, Canadian businesses exporting into the U.S. would be prudent to undertake a full risk analysis on their U.S.-bound exports to assess compliance with customs matters, economic sanctions and export controls, trade remedies and other market access issues.

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