The executive action would additionally reflect a tension within the White House between the economic populists, who have argued for more aggressive and adversarial moves against foreign countries, and the growing influence of pragmatists, who have called for a more measured approach.
During his campaign, Trump repeatedly attacked other countries over their trade practices, arguing some countries were contributing to the U.S. trade deficit — the gap between the cost of the nation’s imports and its exports — by using subsidies and other practices to undercut U.S. firms and lure away jobs.
Through export subsidies, foreign governments provide funds to help their manufacturers lower the price of their exports to make them more attractive to international buyers — a practice often viewed as a violation of World Trade Organization rules.
Trump has argued that the U.S. trade deficit with China and Mexico is disproportionately large, and he has taken particular aim at Beijing, accusing China of manipulating its currency to boost its exports. During the campaign, he promised to formally label China a currency manipulator once he takes office, but he has declined to follow through on that threat.
Should the administration want to take that step, it will have an opportunity to do so soon. Within days, the Treasury Department is expected to release its semiannual currency report. Outside analysis and former Treasury officials do not expect the Trump administration to use the report to formally label China a currency manipulator, but the language the administration uses will be closely studied for clues about how it plans to engage with China about currency issues.
Trump and his advisers reached an agreement with Chinese President Xi Jinping at a meeting last week to launch a 100-day plan to improve trade relations between China and the United States — a much more tepid step than Trump promised during the campaign.
But the executive action under review could eventually lead to more aggressive U.S. trade actions against China, a sign that some voices within the White House believe more is needed.
It could focus specifically on the steel and aluminum markets, as U.S. officials have said that China’s trade practices in these area have had a major impact on U.S. manufacturers’ ability to compete.
A White House official, speaking on the condition of anonymity to discuss the investigation that would be prompted by the executive action, said, “The administration would use the results of that investigation to determine the best path forward, which could potentially include everything from no action at all to the levying of supplemental duties. But whichever action we take would be informed by the results of the investigation and not by predetermined conclusions.”
The Trump administration has said its primary goals include boosting U.S. manufacturing and exports, drawing companies back to the United States, and punishing those that move overseas and try to ship products back to America.
Foreign countries use many tactics to try to win a trade advantage. U.S. manufacturers, Democrats and Republicans have long accused China of using a tactic known as dumping to hurt U.S. companies. Dumping is the practice of exporting an item at a below-market price to undermine industries in other nations.
Trump has signed numerous executive actions since taking office, and many of them have launched reviews or studies. Their final impact is still undetermined.
In his first 80 days as president, Trump has signed two executive orders that direct the government to review the causes of U.S. trade deficits and more strictly enforce anti-dumping provisions. He has also formally withdrawn the United States from the Obama-era 12-nation trade deal known as the Trans-Pacific Partnership. Yet the administration has yet to fulfill other promises made on the campaign trail, including renegotiating the U.S. free trade agreement with Mexico and Canada and branding China a currency manipulator. Congress has yet to confirm one of the White House’s primary trade negotiators, Trade Representative Robert E. Lighthizer.
Ana Swanson contributed to this report.