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Updated December 9, 2020
Section 232 of the Trade Expansion Act of 1962
Background
confidential or classified material) must be published in the
The Trump Administration conducted multiple
Federal Register.
investigations under Section 232 of the Trade Expansion
Presidential Action and Notification. If Commerce finds
Act of 1962 (19 U.S.C. §1862, as amended) to determine if
in the negative, Commerce informs the President and no
certain imports threaten to impair national security.
further action is required. If Commerce determines in the
President Trump acted after five separate investigations
affirmative, the President, upon receipt of the report, has 90
found potential threats; two investigations are ongoing and
days to (1) determine whether he/she concurs with its
another was terminated. Prior to the Trump Administration,
findings; and (2) if so, determine the nature and duration of
a president last imposed tariffs or other trade restrictions
the action to be taken to adjust the subject imports. The
under Section 232 in 1986, based on a 1983 probe into
President may decide to impose tariffs or quotas to offset
imports of machine tools. Recent actions under Section 232
the adverse effect, without any limits on their duration, or
have generated debate in Congress and at the multilateral
take other action. The President may exclude specific
level. Some in Congress favor legislative initiatives to
products or countries. After a determination, the President
amend the congressional delegation of authority.
must implement the action within 15 days, and submit a
Section 232 Process
written statement to Congress explaining the actions or
inaction within 30 days (see Figure 1). The President must
Section 232 allows any department, agency head, or any
“
also publish his determination in the Federal Register.
interested party” to request the Department of Commerce
Figure 1. Section 232 Investigation Process
(Commerce) to initiate an investigation to ascertain the
effect of specific imports on U.S. national security.
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 on 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 (15 CFR Section 705). In terms
of national security, Commerce considers (1) existing
domestic production of the product; (2) future capacity
Source: CRS graphic based on 19 U.S.C. §1862.
needs; (3) manpower, raw materials, production equipment,
facilities, and other supplies needed to meet projected
Prior Section 232 Actions
national defense requirements; (4) growth requirements,
Prior to the Trump Administration, Commerce initiated 26
including the investment, exploration, and development to
Section 232 national security investigations, beginning in
meet them; and (5) any other relevant factors.
1963. Previous investigations of manufactured goods
On imports, Commerce must consider (1) the impact of
focused on specific products, including antifriction bearings
foreign competition on the domestic industry deemed
and gears, and gearing products. Of these 26 cases,
essential for national security; (2) the effects that the
Commerce made negative determinations 62% of the time.
“displacement of domestic products” cause, including
Prior to 2018, when Commerce made positive
substantial unemployment, decreases in public revenue, loss
determinations, the President took action six times (Figure
of investment, special skills, or production capacity; and (3)
2). In one case, the President sought voluntary restraint
any other relevant factors that are causing, or will cause, a
agreements. Five positive determinations and actions
weakening in the national economy. Commerce may
addressed petroleum products or crude oil: one resulted in a
request public comments or hold hearings, if appropriate.
conservation fee, later held illegal by a federal court; two
An Executive Summary of the final report (excluding any
actions were based on the Mandatory Oil Import Program
that predated enactment of Section 232; and, twice the
https://crsreports.congress.gov
Section 232 of the Trade Expansion Act of 1962
President imposed an embargo (on crude oil from Iran in
critical infrastructure sectors. For grain-oriented electrical
1979 and on crude oil from Libya in 1982).
steel exports, Mexico agreed to set up a monitoring system,
avoiding potential tariffs. The petitioner for mobile crane
Figure 2. Section 232 Investigations 1963-2020
imports withdrew its request and Commerce terminated the
investigation. The probe into vanadium imports is ongoing.
How Does Section 232 Differ from Other
Trade Enforcement Tools?
Section 232 is one of several U.S. policy tools to address
imports and unfair trade practices. Section 201 of the Trade
Act of 1974 (19 U.S.C. §2252 et seq.) addresses temporary
safeguards measures for import surges of fairly-traded
goods, based on U.S. International Trade Commission
(ITC) investigations of whether the imports are causing or
Source: CRS graphic based on BIS data (https://www.bis.doc.gov/).
threaten to cause serious injury. Rather than focusing on
Trump Administration and Section 232
national security, however, Section 201 investigations aim
to help the U.S. industry return to health. Presidential action
The Trump Administration opened eight investigations.
is required under Section 201 before tariffs can be imposed.
Commerce initiated investigations into steel and aluminum
imports in April 2017. In each, Commerce analyzed current
Other enforcement tools include antidumping (AD) and
and future requirements for national defense and 16 specific
countervailing duty (CVD) actions, provided when a
critical infrastructure sectors. The agency determined that
domestic industry is materially injured, or threatened with
the quantities and circumstances of the imports threatened
material injury, either by sales found to be at less than fair
to impair the national security of the United States and
value in the U.S. market (AD) or of products found to be
provided recommendations to the President.
subsidized by a foreign government or other public entities
(CVD). Presidential action is not required in these
The President concurred with Commerce’s findings, and in
investigations; it is automatic, based on affirmative findings
March 2018, applied tariffs of 25% and 10% on certain
jointly by the ITC and Commerce.
imports of steel and aluminum, respectively. The United
States initially exempted several countries, such as the
WTO Implications
European Union (EU), from the tariffs, pending
Under the World Trade Organization (WTO) agreements,
negotiations on potential alternative measures. Permanent
Article XXI of the General Agreement on Tariffs and Trade
exemptions were granted to Brazil and South Korea for
(GATT) allows WTO members to take measures in order to
steel and to Argentina for steel and aluminum in exchange
protect “essential security interests.” Several WTO trading
for quotas. Australia was exempted from both tariffs. In
partners, including China, the EU, and India, have
May 2019, the United States, Mexico, and Canada
challenged the current U.S. tariffs by alleging that they
announced a joint monitoring and consultation system to
violate GATT Article I, which obligates WTO members to
replace the tariffs. In January 2020, the President expanded
treat one country’s goods no less favorably than another
the scope of the tariffs to include certain derivative goods.
member’s; and GATT Article II, which generally prohibits
Commerce initiated a third Section 232 investigation into
members from placing tariffs on goods above the upper
the imports of automobiles and certain automotive parts in
limits to which they agreed. Some WTO members have also
May 2018. The President stated that Commerce concluded
asserted that the U.S. actions violate the WTO Agreement
that the imports posed a national security threat because
on Safeguards and have imposed (or plan to impose)
they affected domestic producers’ global competitiveness
counter tariffs on U.S. imports without WTO authorization,
and the research and development needed to maintain U.S.
which also may raise questions about whether those
military superiority. The report has not been released. In
members are upholding similar WTO commitments.
May 2019, the President directed the U.S. Trade
Issues for Congress
Representative to negotiate with Japan, the EU, and others
The recent Section 232 investigations and actions raise a
to address the threat. Autos were part of the negotiations to
number of issues for Congress, including:
update free trade agreements with South Korea and with
What is the impact of the tariffs, and retaliatory tariffs,
Canada and Mexico, but not in the agreement with Japan.
on different sectors of the U.S. economy?
In July 2019, the President did not concur with the
Should Congress consider amending current delegated
Commerce Section 232 finding that imports of uranium ore
authorities under Section 232, such as by requiring an
and related products threatened to impair national security,
economic impact study, congressional consultation or
but did establish a working group to address the issue; the
approval, or by specifying further guidance?
group released policy recommendations in April 2020.
How should Congress work with the Administration to
In February 2020, the President agreed with the Commerce
review the existing Section 232 tariffs and actions?
finding of a national security threat posed by imports of
Could U.S. unilateral actions undermine the WTO rules
titanium sponge and instructed officials to negotiate with
and the multilateral trading system or impact
Japan to ensure U.S. access rather than to restrict imports.
relationships with U.S. allies?
In spring 2020, Commerce initiated three investigations into
imports used in national defense applications and certain
https://crsreports.congress.gov
Section 232 of the Trade Expansion Act of 1962
IF10667
Rachel F. Fefer, Analyst in International Trade and
Finance
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https://crsreports.congress.gov | IF10667 · VERSION 22 · UPDATED