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Updated January 27, 2020
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; he has not yet made a determination
affirmative, the President, upon receipt of the report, has 90
on a fifth investigation. Prior to the Trump Administration,
days to (1) determine whether he concurs with its findings;
the last time a president imposed tariffs or other trade
and (2) if so, determine the nature and duration of the action
restrictions under Section 232 was in 1986, based on a 1983
to be taken to adjust the subject imports. The President may
investigation into imports of machine tools. Recent action
decide to impose tariffs or quotas to offset the adverse
under Section 232 has generated active debate in Congress
effect, without any limits on the duration of tariff or quota
and at the multilateral level. Some in Congress favor
amounts, or take other action. The President may exclude
legislative initiatives to amend the congressional delegation
specific product categories, countries, or provide other
of authority.
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 Section 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
Source: CRS graphic based on 19 U.S.C. §1862.
manpower, raw materials, production equipment, facilities,
and other supplies needed to meet projected national
Prior Section 232 Actions
defense requirements; (4) growth requirements, including
Prior to the Trump Administration, 26 Section 232 national
the 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
201 of the Trade Act of 1974 (19 U.S.C. §2252 et seq.)
court; two actions were based on the Mandatory Oil Import
addresses temporary safeguard measures for import surges
Program that predated enactment of Section 232; and twice
of fairly traded goods based on U.S. International Trade
the President imposed an embargo (on crude oil from Iran
Commission (ITC) investigations of whether the imports
in 1979 and on crude oil from Libya in 1982).
are causing or threaten to cause serious injury. Rather than
Figure 2. Section 232 Investigations 1963-2019
focusing on national security, however, Section 201
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
Source: CRS Graphic based on BIS data (https://www.bis.doc.gov/).
investigations; it is automatic based on affirmative findings
Trump Administration and Section 232
jointly by the ITC and Commerce Department.
Commerce initiated investigations into steel and aluminum
WTO Implications
imports in April 2017 (82 FR 19205, 82 FR 21509). In each
Under the World Trade Organization (WTO) agreements,
investigation, Commerce analyzed current and future
Article XXI of the General Agreement on Tariffs and Trade
requirements for national defense and 16 specific critical
(GATT) allows WTO members to take measures in order to
infrastructure sectors, and determined that the quantities
protect “essential security interests.” However, several
and circumstances of imports threaten to impair the national
WTO trading partners, including China, the EU and India,
security and provided recommendations.
have challenged the current U.S. actions by alleging that
The President concurred with Commerce’s findings, and
they violate GATT Article I, which obligates WTO
effective March 23, 2018, applied tariffs of 25% and 10%
members to treat one country’s goods no less favorably
on certain imports of steel and aluminum, respectively.
than another member’s; and GATT Article II, which
Several countries, including the European Union (EU) were
generally prohibits members from placing tariffs on goods
temporarily exempted from the tariffs, pending negotiations
in excess of the upper limits to which they agreed to when
on potential alternative measures. Permanent exemptions
acceding to the WTO. Some WTO members have also
were granted to Brazil and South Korea for steel and to
asserted that the U.S. actions violate the WTO Agreement
Argentina for steel and aluminum in exchange for quotas.
on Safeguards and have, or plan to, impose counter tariffs
Australia was exempted from both tariffs. In May 2019, the
on U.S. imports, which also may raise questions about
United States, Mexico, and Canada announced a joint
whether they are upholding similar WTO commitments.
monitoring and consultation system to replace the tariffs. In
Issues for Congress
January 2020, the President expanded the tariff scope to
The recent Section 232 investigations and actions raise a
better address the continued threat.
number of issues for Congress, including
Commerce initiated a third Section 232 investigation into
What is the economic impact of the tariffs, and
the imports of automobiles and certain automotive parts in
retaliatory tariffs, on U.S. producers, downstream
May 2018 (83 FR 24735-24737). Per the President,
domestic industries, and consumers?
Commerce concluded that auto imports pose a national
Should Congress consider amending current delegated
security threat because they affect domestic producers’
authorities under Section 232, possibly by requiring
global competitiveness and the research and development
congressional consultation or approval, requiring an
needed to maintain U.S. military superiority. The report has
economic impact study, or by specifying further
not been released. On May 17, 2019, the President directed
guidance for the investigation?
the U.S. Trade Representative to negotiate with Japan, the
Should Congress consider establishing specific or
EU, and others to address the threat. Autos were part of the
enhanced new trade agreement negotiating objectives
Administration’s negotiations to update free trade
to pursue negotiations to establish multilateral rules
agreements with South Korea and with Canada and Mexico,
that address newer issues such as excess capacity,
but were excluded from the agreement with Japan.
state-owned enterprises, or anti-corruption?
In July 2019, the President did not concur with the
What is the potential impact of using unilateral
Commerce Section 232 finding that imports of uranium ore
enforcement tools on U.S. allies? Will they be less
and related products threaten to impair national security,
likely to engage or partner in other negotiations?
but did establish a working group to review the domestic
Could U.S. unilateral actions and broad application of
supply chain. The President has not announced a decision
the WTO Article XXI undermine the WTO rules and
on a fifth investigation into titanium sponge imports.
the multilateral trading system?
How Does Section 232 Differ from Other
Trade Enforcement Tools?
Rachel F. Fefer, Analyst in International Trade and
Section 232 is one of several U.S. policy tools to address
Finance
imports and unfair trade practices. For example, Section
https://crsreports.congress.gov
Section 232 of the Trade Expansion Act of 1962
IF10667
Vivian C. Jones, Specialist in International Trade and
Finance
Disclaimer
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https://crsreports.congress.gov | IF10667 · VERSION 16 · UPDATED