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Updated July 16, 2019
Section 232 of the Trade Expansion Act of 1962
Background
if appropriate. An Executive Summary of the final report
The Trump Administration has conducted multiple
(excluding any confidential or classified material) must be
investigations under Section 232 of the Trade Expansion
published in the Federal Register.
Act of 1962 (19 U.S.C. § 1862, as amended) to determine if
Presidential Action and Notification. If Commerce finds
certain imports threaten to impair national security.
in the negative, Commerce informs the President and no
President Trump acted after four separate investigations
further action is required. If Commerce determines in the
found potential threats; one additional investigation is
affirmative, the President, upon receipt of the report, has 90
ongoing. Prior to the Trump Administration, the last time a
days to (1) determine whether he concurs with its findings;
president imposed tariffs or other trade restrictions under
and (2) if so, determine the nature and duration of the action
Section 232 was in 1986, based on a 1983 investigation into
to be taken to adjust the subject imports. The President may
imports of machine tools. Recent action under Section 232
decide to impose tariffs or quotas to offset the adverse
has generated active debate in Congress and at the
effect, without any limits on the duration of tariff or quota
multilateral level, including legislative initiatives to amend
amounts, or take other action. The President may exclude
the congressional delegation of authority under Section 232
specific product categories, countries, or provide other
to the President.
Section 232 Process
exemptions. After making a determination, the President
must implement the action within 15 days, and submit a
Section 232 allows any department, agency head, or any
written statement to Congress explaining the actions or
“interested party” to request the Department of Commerce
inaction within 30 days. The President must also publish his
(Commerce) to initiate an investigation to ascertain the
determination in the Federal Register.
effect of specific imports on the national security of the
Figure 1. Section 232 Investigation Process
United States. Commerce may self-initiate an investigation.
Investigation. Once a Section 232 investigation is
requested in writing, Commerce must “immediately initiate
an appropriate investigation to determine the effects on the
national security” of the subject imports. After consulting
with the Secretary of Defense, other “appropriate officers of
the United States,” and the public, if appropriate,
Commerce has 270 days from the initiation date to prepare
a report advising the President whether the targeted product
is being imported “in certain quantities or under such
circumstances” to impair U.S. national security, and to
provide recommendations based on the findings.
The Bureau of Industry and Security (BIS) at Commerce
conducts the investigation based on federal regulations
codified in 15 CFR § 705 (Effect of Imported Articles on
the National Security). In terms of national security,
Commerce considers: (1) existing domestic production of
the product; (2) future capacity needs; (3) the manpower,
Source: CRS graphic based on 19 U.S.C. § 1862.
raw materials, production equipment, facilities, and other
supplies needed to meet projected national defense
Prior Section 232 Actions
requirements; (4) growth requirements, including the
Prior to the Trump Administration, 26 Section 232 national
investment, exploration, and development to meet them;
security investigations were initiated, beginning in 1963.
and (5) any other relevant factors.
Previous investigations of manufactured goods were more
Regarding the subject imports, Commerce must consider:
tightly focused on specific products, including antifriction
(1) the impact of foreign competition on the domestic
bearings and gears and gearing products. Of the 26 cases
industry deemed essential for national security; (2) the
initiated (excluding Trump Administration investigations),
effects that the “displacement of domestic products” cause,
Commerce made negative determinations 62% of the time.
including substantial unemployment, decreases in public
Prior to 2018, when Commerce made positive
revenue, loss of investment, special skills, or production
determinations, the President recommended action six times
capacity; and (3) any other relevant factors that are causing,
(Figure 2). In one case, the President sought voluntary
or will cause a weakening in the national economy.
restraint agreements. Five positive determinations and
Commerce may request public comments or hold hearings,
actions were related to petroleum products or crude oil: one
https://crsreports.congress.gov
Section 232 of the Trade Expansion Act of 1962
resulted in a conservation fee, later held illegal by a federal
addresses temporary safeguard measures for import surges
court; two actions were based on the Mandatory Oil Import
of fairly traded goods based on U.S. International Trade
Program that predated enactment of Section 232; and twice
Commission (ITC) investigations of whether the imports
the President imposed an embargo (on crude oil from Iran
are causing or threaten to cause serious injury. Rather than
in 1979 and on crude oil from Libya in 1982).
focusing on national security, however, Section 201
Figure 2. Section 232 Investigations 1963-2019
investigations aim to help the U.S. industry return to health.
Presidential action is also required in Section 201.
Other enforcement tools include antidumping (AD) and
countervailing duty (CVD) actions, provided when a
domestic industry is materially injured, or threatened with
material injury, either by sales found to be at less than fair
value in the U.S. market (AD) or of products found to be
subsidized by a foreign government or other public entities
(CVD). Presidential action is not required in these
investigations; it is automatic based on affirmative findings
Source: CRS Graphic based on BIS data (https://www.bis.doc.gov/).
jointly by the ITC and Commerce Department.
Trump Administration and Section 232
WTO Implications
Commerce initiated investigations into steel and aluminum
Under the World Trade Organization (WTO) agreements,
imports in April 2017 (82 FR 19205, 82 FR 21509). In each
Article XXI of the General Agreement on Tariffs and Trade
investigation, Commerce analyzed current and future
(GATT) allows WTO members to take measures in order to
requirements for national defense and 16 specific critical
protect “essential security interests.” However, several
infrastructure sectors, and determined that the quantities
WTO trading partners, including China, the EU and India,
and circumstances of imports threaten to impair the national
have challenged the current U.S. actions by alleging that
security and provided recommendations.
they violate GATT Article I, which obligates WTO
The President concurred with Commerce’s findings, and
members to treat one country’s goods no less favorably
effective March 23, 2018, applied 25% tariffs on steel
than another member’s; and GATT Article II, which
imports and 10 % tariffs on imports of aluminum. Initially,
generally prohibits members from placing tariffs on goods
several countries, including Canada, Mexico, and the
in excess of the upper limits to which they agreed to when
European Union (EU) were temporarily exempted from the
acceding to the WTO. Some WTO members have also
tariffs, pending negotiations on potential alternative
asserted that the U.S. actions violate the WTO Agreement
measures. Permanent tariff exemptions were granted to
on Safeguards and have, or plan to, impose counter tariffs
Brazil and South Korea for steel and to Argentina for steel
on U.S. imports, which also may raise questions about
and aluminum in exchange for quantitative limitations.
whether they are upholding similar WTO commitments.
Australia was exempted from both tariffs with no
Issues for Congress
quantitative restrictions. In May 2019, the United States,
The recent Section 232 investigations and actions raise a
Mexico, and Canada announced a joint monitoring and
number of issues for Congress, including:
consultation system to replace the tariffs.
What is the economic impact of the tariffs, and
Commerce initiated a third Section 232 investigation into
retaliatory tariffs, on U.S. producers, downstream
the imports of automobiles and certain automotive parts in
domestic industries, and consumers?
May 2018 (83 FR 24735-24737). Commerce concluded that
Should Congress consider amending current delegated
auto imports pose a national security threat because they
authorities under Section 232, possibly by requiring
affect domestic producers’ global competitiveness and the
congressional consultation or approval, requiring an
research and development needed to maintain U.S. military
economic impact study, or by further delineating the
superiority. On May 17, 2019, the President directed the
process and factors to be considered in an
U.S. Trade Representative to negotiate with Japan, the EU,
investigation?
and others to address the threat. Autos were part of the
Administration’s negotiations to
Should Congress consider establishing specific or
update free trade
enhanced new trade agreement negotiating objectives
agreements with South Korea and with Canada and Mexico.
to pursue negotiations to establish multilateral rules
In July 2019, the President did not concur with the
that address newer issues such as excess capacity,
Commerce Section 232 finding that uranium ore and
state-owned enterprises, or anti-corruption?
product imports threaten to impair national security, but he
What is the potential impact of using unilateral
did establish a working group to review the domestic
enforcement tools on U.S. allies? Will they be less
supply chain. A fifth investigation into titanium sponge
likely to engage or partner in other negotiations?
imports requested by a U.S. firm is ongoing.
Could U.S. unilateral actions and broad application of
How Does Section 232 Differ from Other
Trade Enforcement Tools?
the WTO Article XXI undermine the WTO rules and
the multilateral trading system?
Section 232 is one of several U.S. policy tools to address
imports and unfair trade practices. For example, Section
Rachel F. Fefer, Analyst in International Trade and
201 of the Trade Act of 1974 (19 U.S.C. § 2252 et seq.)
Finance
https://crsreports.congress.gov
Section 232 of the Trade Expansion Act of 1962
IF10667
Vivian C. Jones, Specialist in International Trade and
Finance
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https://crsreports.congress.gov | IF10667 · VERSION 14 · UPDATED