Trade Enforcement

Federal agencies help pursue enforcement actions when foreign entities violate U.S. trade laws and regulations that can harm the U.S. economy or disadvantage U.S. industry. Among other things, federal agencies take actions against unfairly traded, illicit, and counterfeit goods. However, agencies could improve how they pursue such activities.

For example:

• Staffing issues. U.S. Customs and Border Protection (CBP) enforces the customs and trade laws that protect the nation’s economy and the health and safety of the American people. CBP staff conduct trade enforcement activities at more than 300 ports by collecting revenue, identifying noncompliant imports, and seizing prohibited goods (such as counterfeit drugs). However, CBP has not met the staffing levels set by Congress for trade positions—and these shortfalls could affect its ability to effectively enforce trade laws (e.g., fewer cargo inspections). CBP should develop a long-term hiring plan for trade positions.

CBP's Role in Inspecting Imports

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• Refunds for customs duties. Since 1789, the U.S. government’s drawback program has encouraged manufacturing and exports by refunding certain customs duties. For example, a merchant who paid duties on imported fabric, made it into clothes, and then exported the clothes could claim a refund for import duties paid. CBP runs the drawback program, which refunds about $1 billion a year. However, there are problems with how CBP checks these claims that could result in it issuing refunds improperly. 
• Intellectual property. Infringement of intellectual property rights through the illegal importation and distribution of counterfeit goods harms the U.S. economy and can threaten the health and safety of consumers. CBP leads efforts to stop imported counterfeit goods at the border. However, the agency needs to do more to evaluate the results of its activities.

Examples of Counterfeit Products GAO Purchased Online

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• Conflict minerals. Armed groups in the Democratic Republic of the Congo (DRC) and neighboring countries continue to commit severe human rights abuses and profit from the mining and trading of "conflict minerals.” These minerals include gold and specific ores for tantalum, tin, and tungsten. The State Department, in consultation with the U.S. Agency for International Development, has developed a conflict minerals strategy—but these agencies need to develop performance indicators to assess progress.  
• Tariffs. Various trade remedy laws are available to protect U.S. industries and workers injured by unfair foreign trade practices. For example, in 2018, the President placed tariffs on some imports of steel and aluminum citing national security concerns and excess global supply. However, the Department of Commerce and CBP have been challenged to administer the tariffs and requests for tariff exclusion efficiently. The agencies have made changes, but further process improvements are needed to ensure they make decisions in a timely manner, collect duties correctly, and update public guidance to reflect the changes they have made.