Making America's economy stronger has been a top priority for President Trump in his second term. But two of the major tools his administration uses to protect economic security have run into snags.
The Trump administration has leaned heavily on export controls on potentially sensitive technology products and tariffs as part of their global economic strategy.
However, neither tool has been working as planned.
A bottleneck worth billions
The U.S. has an advanced export control regime that screens and sometimes blocks foreign countries from buying American products with a potential military use or which contain technology the U.S. is competing with other countries on.
Sean Stein, head of the US China Business Council, is quick to praise those tools in concept.
"Export controls are really important," he said in an interview. "Export controls are a national security measure that are sort of a check on what we trade."
But the American companies he represents —from pharmaceuticals to manufacturing —are frustrated with how they are working in practice.
The controls are enforced by a government department called the Bureau of Industry and Security, or BIS. Stein says the agency has been slow walking the export licenses needed by business to sell some of their products internationally.
"We've got cases that are waiting for more than a year," Stein said.
Normally, getting a license to export sensitive goods should not exceed 90 days, according to BIS' own policies. But an August survey conducted by the organization Stein represents found that of 31 American firms selling to China, 95 percent of companies said they are facing license delays.
That delay has resulted in lost sales, with American firms often losing out to Chinese competitors selling similar products or services.
"What we've seen in the survey is not, you know, millions of dollars of business, but billions of dollars of business that have been lost," Stein said.
Delays are compounded by fear of making the wrong decision
The delays haven't been around forever.
Kate Koren, deputy head of the economics program at the Center for Strategic and International Studies in Washington, blames the lag on incoherent policy that began after China's leader Xi Jinping and President Trump met in South Korea last October.
For example, the Trump administration suddenly rolled back more stringent export controls after the South Korea meeting. Earlier, it also reversed a decision and allowed American semiconductor company Nvidia to sell advanced chips to China.
Koren said there are two options.
"We're going to really go full in on the national security aspect," or, she said, "kind of really fall into the other side of promoting U.S. business and U.S. competition and allowing market access."
This mixed signaling that switches between encourage American business abroad while also trying to protect American technology from China has confused BIS, Koren said.
"The leadership is unsure of the direction, which is leading to a delay. There's also been massive turnover," said Koren.
That turnover included Koren, who left the agency in January.
One current and two other former BIS employees who were granted anonymity because they were not authorized to speak to the media, told NPR that fear of making a wrong decision has led BIS' head, undersecretary Jeffrey Kessler, to personally screen all export license applications. That's creating a huge bottleneck, they said.
"Specifically what [Kessler] is looking for I have no idea. There is no good pattern or analysis," said the current employee.
Fraud and legal setbacks hit tariffs
Tariffs have been the other component to the Trump administration's economic toolkit.
But they have encountered legal challenges and setbacks. This past February, the Supreme Court struck down a large swath of tariffs enacted citing the International Emergency Economic Powers Act (IEEPA), arguing president Trump lacked the authority to use IEEPA during peacetime.
Meanwhile, the remaining tariffs face growing problems with fraud—particularly those on goods from China.
One major problem is transshipment, where goods are routed to hide their country of origin, before being shipped to the U.S., to avoid higher tariff rates.
Transshipment is costing the U.S. about $45 billion to $75 billion a year, according to a White House report.
"We got into a world of tariffs where there's tariff evasions on steroids," said Peter Navarro, an economic adviser to Trump told reporters during a briefing earlier this month.
Data also suggests importer intermediary companies may be underreporting the value of goods entering the U.S.
William George, head of research at trade data firm Import Genius, points to the $112 billion gap last year between the value of goods China says it exports to the U.S. and the much lower number the U.S. says it receives from China.
A gap could be caused by middleman costs or lower prices in China. But George said that's not necessarily happening here.
The average value of cargo containers from China to the U.S. has also been dropping, according to data provided to NPR by Import Genius as well as from Datamyne, a trade intelligence tool owned by logistics technology company, Descartes.
"This drop was outpacing what we would expect to see for traditional, normal shifting of supply chains in response to the tariff," says George. His analysis also found cargo values began dropping shortly after Trump's "liberation day" tariffs were announced last year.
"What that indicates to us is that there are sort of non-physical schemes at work to minimize the tariff burden," says George.
Non-physical, like fraud, with importing companies understating how much they are bringing in to the U.S., and therefore paying less tariffs.
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