Section 232 of the Trade Expansion Act of 1962

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Updated June 3, 2020
Section 232 of the Trade Expansion Act of 1962
Background
confidential or classified material) must be published in the
The Trump Administration has 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 additional investigations are
days to (1) determine whether he/she concurs with its
ongoing. Prior to the Trump Administration, 1986 was the
findings; and (2) if so, determine the nature and duration of
last time a president imposed tariffs or other trade
the action to be taken to adjust the subject imports. The
restrictions under Section 232, based on a 1983
President may decide to impose tariffs or quotas to offset
investigation into imports of machine tools. Recent action
the adverse effect, without any limits on their duration, or
under Section 232 has generated considerable debate in
take other action. The President may exclude specific
Congress and at the multilateral level. Some in Congress
products or countries. After a presidential determination,
favor legislative initiatives to amend the congressional
the President must implement the action within 15 days,
delegation of authority.
and submit a written statement to Congress explaining the
Section 232 Process
actions or inaction within 30 days (see Figure 1). The
Section 232 allows any department, agency head, or any
President must also publish his determination in the Federal
“interested party” to request the Department of Commerce
Register.
(Commerce) to initiate an investigation to ascertain the
Figure 1. Section 232 Investigation Process
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
needs; (3) manpower, raw materials, production equipment,

Source: CRS graphic based on 19 U.S.C. §1862.
facilities, and other supplies needed to meet projected
national defense requirements; (4) growth requirements,
Prior Section 232 Actions
including the investment, exploration, and development to
Prior to the Trump Administration, 26 Section 232 national
meet them; and (5) any other relevant factors.
security investigations were initiated, beginning in 1963.
On imports, Commerce must consider (1) the impact of
Previous investigations of manufactured goods were more
foreign competition on the domestic industry deemed
tightly focused on specific products, including antifriction
essential for national security; (2) the effects that the
bearings and gears and gearing products. Of these 26 cases,
“displacement of domestic products” cause, including
Commerce made negative determinations 62% of the time.
substantial unemployment, decreases in public revenue, loss
Prior to 2018, when Commerce made positive
of investment, special skills , or production capacity; and (3)
determinations, the President recommended action six times
any other relevant factors that are causing, or will cause, a
(Figure 2). In one case, the President sought voluntary
weakening in the national economy. Commerce may
restraint agreements. Five positive determinations and
request public comments or hold hearings, if appropriate.
actions were related to petroleum products or crude oil: one
An Executive Summary of the final report (excluding any
resulted in a conservation fee, later held illegal by a federal
court; two actions were based on the Mandatory Oil Import
https://crsreports.congress.gov


Section 232 of the Trade Expansion Act of 1962
Program that predated enactment of Section 232; and, twice
defense applications as well as certain critical infrastructure
the President imposed an embargo (on crude oil from Iran
sectors. Investigations into imports of grain-oriented
in 1979 and on crude oil from Libya in 1982).
electrical steel, mobile cranes, and vanadium are ongoing.
Figure 2. Section 232 Investigations 1963-2020
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. For example, Section
201 of the Trade Act of 1974 (19 U.S.C. §2252 et seq.)
addresses temporary safeguard measures for import surges
of fairly-traded goods, based on U.S. International Trade
Commission (ITC) investigations of whether the imports
are causing or threaten to cause serious injury. Rather than

focusing on national security, however, Section 201
Source: CRS Graphic based on BIS data (https://www.bis.doc.gov/).
investigations aim to help the U.S. industry return to health.
Trump Administration and Section 232
Presidential action is also required under Section 201.
Other enforcement tools include antidumping (AD) and
Commerce initiated investigations into steel and aluminum
countervailing duty (CVD) actions, provided when a
imports in April 2017. In each investigation, Commerce
domestic industry is materially injured, or threatened with
analyzed current and future requirements for national
material injury, either by sales found to be at less than fair
defense and 16 specific critical infrastructure sectors, and
value in the U.S. market (AD) or of products found to be
determined that the quantities and circumstances of imports
subsidized by a foreign government or other public entities
threaten to impair the national security of the United States
(CVD). Presidential action is not required in these
and provided recommendations.
investigations; it is automatic, based on affirmative findings
The President concurred with Commerce’s findings, and
jointly by the ITC and Commerce Department.
effective March 23, 2018, applied tariffs of 25% and 10%
on certain imports of steel and aluminum, respectively.
WTO Implications
Several countries, including the European Union (EU),
Under the World Trade Organization (WTO) agreements,
were temporarily exempted from the tariffs , pending
Article XXI of the General Agreement on Tariffs and Trade
negotiations on potential alternative measures. Permanent
(GATT) allows WTO members to take measures in order to
exemptions were granted to Brazil and South Korea for
protect “essential security interests.” Still, several WTO
steel and to Argentina for steel and aluminum in exchange
trading partners, including China, the EU, and India, have
for quotas. Australia was exempted from both tariffs. In
challenged the current U.S. actions by alleging that they
May 2019, the United States, Mexico, and Canada
violate GATT Article I, which obligates WTO members to
treat one country’s goods no less favorably than
announced a joint monitoring and consultation system to
another
replace the tariffs. In January 2020, the President expanded
member’s; and GATT Article II, which generally prohibits
the tariff scope to better address the continued threat.
members from placing tariffs on goods in excess of the
upper limits to which they agreed. Some WTO members
Commerce initiated a Section 232 investigation into the
have also asserted that the U.S. actions violate the WTO
imports of automobiles and certain automotive parts in May
Agreement on Safeguards and have, or plan to, impose
2018. According to the President, Commerce concluded
counter tariffs on U.S. imports, which also may raise
that the imports pose a national security threat because they
questions about whether they are upholding similar WTO
affect domestic producers’ global competitiveness and the
commitments.
research and development needed to maintain U.S. military
Issues for Congress
superiority. The report has not been released. On May 17,
2019, the President directed the U.S. Trade Representative
The recent Section 232 investigations and actions raise a
number of issues for Congress, including
to negotiate with Japan, the EU, and others to address the
threat. Autos were part of the negotiations to update free
 What is the impact of the tariffs, and retaliatory tariffs,
trade agreements with South Korea and with Canada and
on different sectors of the U.S. economy?
Mexico, but were excluded from the agreement with Japan.
 Should Congress consider amending current delegated
In July 2019, the President did not concur with the
authorities under Section 232, such as requiring an
Commerce Section 232 finding that imports of uranium ore
economic impact study, congressional consultation or
and related products threaten to impair national security,
approval, or by specifying further guidance?
but did establish a working group to address the issue; the
 Should Congress consider establishing specific or
group released policy recommendations in April 2020.
enhanced new trade agreement negotiating objectives
In February 2020, the President agreed with the Commerce
to pursue negotiations for multilateral rules on issues
finding of a national security threat posed by imports of
such as excess capacity or state-owned enterprises?
titanium sponge and instructed officials to negotiate with
 What is the potential impact of using unilateral
Japan to ensure U.S. access rather than to restrict imports.
enforcement tools on U.S. allies?
In spring 2020, Commerce initiated three separate Section
 Could U.S. unilateral actions undermine the WTO rules
232 investigations into imports that are used in national
and the multilateral trading system?
https://crsreports.congress.gov

Section 232 of the Trade Expansion Act of 1962

Vivian C. Jones, Specialist in International Trade and
Finance
Rachel F. Fefer, Analyst in International Trade and
IF10667
Finance


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https://crsreports.congress.gov | IF10667 · VERSION 19 · UPDATED