After a series of early controversial decisions and legislative headaches, the Trump administration is looking for a much-needed win with its latest rumored initiative: an executive order that targets “unfair” product dumping practices throughout the global manufacturing industry.

According to a new report from Axios, administration sources confirmed that the president is exploring an executive order that could affect the steel and aluminum industries, as well as manufacturers of other products like household appliances.

The order would trigger the launch of an investigation into product dumping from foreign companies. In the context of international trade, dumping is the practice of charging less for an exported product in a foreign market than is charged in the domestic market.

In other words, when other countries are able to produce goods like steel and aluminum at a lower cost than American companies can, they can dump those goods into our markets at a cheaper price, making it difficult for domestic producers to compete.

“The administration will 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," a White House official told Axios. "But whichever action we take will be informed by the results of the investigation and not by predetermined conclusions."

If Trump’s investigation into dumping does result in something substantial—like an import tariff—it is sure to have an impact throughout the manufacturing sector.

For one, any new taxes, tariffs, or regulations could hurt the bottom line of American companies that rely on cheap, imported goods. For example, manufacturers that rely on imported steel could be under pressure.

In the same vein, new policies in this sphere are sure to have an impact on the steel and aluminum industries around the world. Investors should keep an eye on the Market Vectors Steel ETF (SLX Quick QuoteSLX - Free Report) for any reactions as the executive order continues to be fleshed out.

While foreign steel producers and those who rely on cheap, foreign steel and other goods might be hurt by new tariffs, the policy would stem from Trump’s efforts to bolster American manufacturing, so there’s sure to be some benefit for domestic businesses.

An import tariff may be welcomed by American steel producers, for example, and any manufacturers that have already opted to use American steel might see their competition’s price advantage be wiped out.

Regardless, it seems we are still a long way out from any actual policy. Remember, the executive order, which Axios says could be done as early as later this month, would launch an investigation into dumping.

From there, the Trump administration would still need to study the results of the investigation before attempting to implement any substantial changes.

Nevertheless, investors should be keeping a close eye on this—and any other policy that could have an effect on the global manufacturing supply chain.

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