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Updated August 17, 2021
Section 232 of the Trade Expansion Act of 1962
Background
An Executive Summary of the final report (excluding any
President Biden is reviewing the existing Section 232 tariffs
confidential or classified material) must be published in the
imposed by President Trump and has raised the possibility
Federal Register.
of new investigations. Section 232 allows the President to
Presidential Action and Notification. If Commerce finds
impose import restrictions based on an affirmative
in the negative, Commerce informs the President and no
investigation determination by the Department of
further action is required. If Commerce determines in the
Commerce (Commerce) that certain imports threaten to
affirmative, the President, upon receipt of the report, has 90
impair the national security. After conducting eight Section
days to: (1) determine whether he/she concurs with its
232 investigations, President Trump acted five times, twice
findings; and (2) if so, determine the nature and duration of
imposing tariffs, declining to act on a sixth finding; another
the action to be taken to adjust the subject imports. The
investigation found no threat, and one was terminated.
President may decide to impose tariffs or quotas to offset
Recent actions under Section 232 have generated debate in
the adverse effect, without any limits on their duration, or
Congress and at the multilateral level in the World Trade
take other action. The President may exclude specific
Organization (WTO). Some in Congress favor legislative
products or countries. After a determination, the President
options to 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
Section 232 of the Trade Expansion Act of 1962 (19 U.S.C.
inaction within 30 days (see Figure 1). The President must
§1862, as amended) allows any department, agency head,
also publish his determination in the Federal Register.
or any “interested party” to request that Commerce
Figure 1. Section 232 Investigation Process
investigate 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
Source: CRS graphic based on 19 U.S.C. §1862.
domestic production of the product; (2) future capacity
Prior Section 232 Actions
needs; (3) manpower, raw materials, production equipment,
Prior to the Trump Administration, Commerce initiated 26
facilities, and other supplies needed to meet projected
Section 232 national security investigations, beginning in
national defense requirements; (4) growth requirements,
1963. Of the 26 cases, Commerce made negative
including the investment, exploration, and development to
determinations 62% of the time. Prior to 2018, when
meet them; and (5) any other relevant factors.
Commerce made positive determinations, the President
On imports, Commerce must consider: (1) the impact of
took action six times (Figure 2). Five positive findings
foreign competition on the domestic industry deemed
addressed petroleum products or crude oil, resulting in
essential for national security; (2) the effects that the
actions that included two embargos (on crude oil from Iran
“displacement of domestic products” cause, including
in 1979 and on crude oil from Libya in 1982). Aside from
substantial unemployment, decreases in public revenue, loss
the Trump Administration, a president last imposed tariffs
of investment, special skills, or production capacity; and (3)
or other trade restrictions under Section 232 in 1986.
any other relevant factors that are causing, or will cause, a
weakening in the national economy. Commerce may
Trump Administration and Section 232
request public comments or hold hearings, if appropriate.
The Trump Administration opened eight Section 232
investigations. Commerce initiated two investigations, into
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Section 232 of the Trade Expansion Act of 1962
steel and aluminum imports, in April 2017. In each,
Other import policy tools include antidumping (AD) and
Commerce analyzed current and future requirements for
countervailing duty (CVD) actions, provided when a
national defense and 16 specific critical infrastructure
domestic industry is materially injured, or threatened with
sectors. The agency determined that the quantities and
material injury, either by sales found to be at less than fair
circumstances of the imports threatened to impair U.S.
value in the U.S. market (AD) or of products found to be
national security and recommended presidential action.
subsidized by a foreign government or other public entities
(CVD). Presidential action is not required in these
President Trump concurred with Commerce’s findings, and
investigations; it is automatic, based on affirmative findings
in March 2018, applied tariffs of 25% and 10% on certain
jointly by the ITC and Commerce.
imports of steel and aluminum, respectively, covering most
U.S. trading partners. Permanent exemptions were granted
Figure 2. Section 232 Investigations 1963-2021
to Brazil and South Korea for steel and to Argentina for
steel and aluminum in exchange for quotas. Australia was
exempted from both tariffs. In May 2019, President Trump
lifted the metal tariffs on imports from Canada and Mexico
as part of efforts toward congressional ratification of the
new U.S.-Mexico-Canada Agreement (USMCA), replacing
the tariffs with a joint monitoring and consultation system.
In January 2020, President Trump expanded the scope of
the tariffs to include certain derivative goods.
Source: CRS graphic based on BIS data (https://www.bis.doc.gov/).
Commerce initiated a third investigation into the imports of
WTO Implications
automobiles and certain automotive parts in May 2018, and
Under the World Trade Organization (WTO) agreements,
concluded that the imports posed a national security threat.
Article XXI of the General Agreement on Tariffs and Trade
The Trump Administration highlighted the possibility of
(GATT) allows WTO members to take measures in order to
imposing Section 232 auto tariffs on top suppliers of U.S.
protect “essential security interests.” Several WTO trading
auto imports, which some analysts argue influenced the
partners, including China, the European Union (EU), and
outcome of U.S. trade negotiations, including with Japan.
India, have challenged the current U.S. tariffs by alleging
Ultimately, the Administration did not take further action.
that they violate GATT Article I, which obligates WTO
members to treat one country’s goods no less favorably
In July 2019, President Trump did not concur with the
than another member’s; and GATT Article II, which
Commerce Section 232 finding that imports of uranium ore
generally prohibits members from placing tariffs on goods
and related products threatened to impair national security,
above the upper limits to which they agreed. Some WTO
but did establish a working group to address the issue.
members have also asserted that the U.S. actions violate the
In February 2020, President Trump agreed with the finding
WTO Agreement on Safeguards and have imposed counter
of a national security threat posed by imports of titanium
tariffs on U.S. imports without WTO authorization, which
sponge and instructed officials to negotiate with Japan to
also may raise questions about whether those members are
ensure U.S. access rather than to restrict imports.
upholding similar WTO commitments.
In spring 2020, Commerce initiated three investigations into
Issues for Congress
imports used in national defense applications and certain
The Biden Administration continues to retain the Section
critical infrastructure sectors. Commerce found a threat to
232 tariffs on steel and aluminum imports. Its supply chain
impair national security from imports of grain-oriented
review (EO 14017) recommended potential new Section
electrical steel for transformers for which Mexico agreed to
232 investigations for certain imports to address potential
set up a monitoring system, avoiding potential tariffs. The
critical supply chain vulnerabilities. The recent Section 232
petitioner for mobile crane imports withdrew its request and
investigations and actions raise a number of issues for
Commerce terminated the investigation. The probe into
Congress, including:
vanadium imports found no national security threat.
Should Congress consider amending current delegated
How Does Section 232 Differ from Other
authorities under Section 232, such as by requiring an
Trade Enforcement Tools?
economic impact study, congressional consultation or
approval, or by specifying further guidance?
Section 232 is one of several U.S. policy tools addressing
imports. Other tools include Section 201 of the Trade Act
Have the Section 232 tariffs achieved the stated goals?
of 1974 (19 U.S.C. §2252 et seq.) to potentially impose
How should Congress work with the Administration to
temporary safeguard measures for import surges of fairly-
review the existing Section 232 tariffs and actions?
traded goods, based on U.S. International Trade
How are U.S. unilateral increased tariff actions
Commission (ITC) investigations of whether the imports
impacting relationships with U.S. allies and the
are causing or threaten to cause serious injury. Rather than
multilateral trading system?
focusing on national security, however, Section 201
investigations aim to help the U.S. industry return to health
Rachel F. Fefer, Analyst in International Trade and
and any actions taken are temporary. Similar to Section
Finance
232, presidential action is required under Section 201
IF10667
before tariffs can be imposed.
https://crsreports.congress.gov
Section 232 of the Trade Expansion Act of 1962
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https://crsreports.congress.gov | IF10667 · VERSION 23 · UPDATED