Updated December 31, 2018
Safeguards: Section 201 of the Trade Act of 1974
On January 23, 2018, President Trump proclaimed a fouryear safeguard measure on imports of certain crystalline
silicon photovoltaic cells (solar cells) and modules, and a
three-year safeguard on large residential washing machines.
These safeguards, issued under Section 201 of the Trade
Act of 1974 (19 U.S.C. §2251), imposed additional tariffs
and quotas on U.S. imports of these products. The
safeguards were instituted based on findings by the U.S.
International Trade Commission (ITC) that these goods are
being imported into the United States in such increased
quantities that they are a substantial cause of serious injury
to U.S. manufacturers. The ITC also recommended possible
steps to remedy the injury.
Factors the ITC must consider when determining injury
include (1) the significant idling of production facilities; (2)
the inability of a significant number of firms to carry out
domestic production at a reasonable level of profit; and (3)
significant unemployment or underemployment within the
U.S. industry. The ITC also considers import trends and
other factors, as well as declines in production, profits,
wages, productivity, and employment. The ITC makes its
injury determination based on a vote of the Commissioners.
If the Commission is equally divided, the President may
select either option.
Figure 1. Section 201 Timeline
What Is Section 201?
Section 201 or “safeguard” actions are designed to provide
temporary relief for a U.S. industry (for example, additional
tariffs or quotas on imports) in order to facilitate positive
adjustment of the industry to import competition. “Positive
adjustment” in the law means the ability of the industry to
compete successfully with imports after termination of the
safeguard measure, or the industry’s orderly transfer of
resources to other productive pursuits; and the ability of
dislocated workers to transition productively. Section 201
actions are deemed consistent with U.S. international
obligations provided that they conform to the World Trade
Organization (WTO) Agreement on Safeguards.
Section 201 Process
Section 201 investigations are generally initiated by a
written petition filed by a trade association, firm, union, or
group of workers representing a U.S. industry. Petitioners
must also include (with the petition or within 120 days) a
plan to facilitate the industry’s positive adjustment to
import competition. Investigations may also be triggered by
House Ways and Means or Senate Finance Committee
resolutions, at the request of the U.S. Trade Representative
(USTR), or at the ITC’s own initiative.
The ITC’s investigative process occurs in two phases. In
each phase, the ITC must hold hearings, solicit public
comments, and publish all findings in the Federal Register.
In the first phase, the focus is on the affected U.S. industry
and whether it is being seriously injured or threatened with
serious injury; and, if so, whether an increase in imports are
a “substantial cause” thereof. This phase must be completed
within 120 days after the filing of the petition, unless the
ITC determines that the investigation is “extraordinarily
complicated.” In this case, it may take up to 30 additional
days to make an injury determination. The timeline may be
further extended if the petitioner has alleged “critical
circumstances” or the product is perishable; because
temporary relief may be provided in these cases.
Source: Chart by CRS.
Note: Timeline is extended if ITC determines case is complicated,
critical circumstances are alleged, or merchandise is perishable.
If the ITC makes an affirmative injury determination, it
considers actions that would address the serious injury and
would be most effective in facilitating the industry’s
positive adjustment to import competition. It may
recommend: (1) an increase in, or imposition of, a duty on
the imports; (2) a tariff-rate quota on the product; (3) a
modification, or imposition of, any quantitative restriction
on imports; or (4) any combination of these actions. In
addition to these remedies, the ITC may also recommend
that the President initiate international negotiations or
otherwise alleviate the injury or threat, or implement any
other action authorized under law to facilitate positive
import competition. Only those Commission members who
concurred in the affirmative injury determination may vote
on the recommended remedy, although other
Commissioners may submit separate views.
ITC Report to the President
Unless an extension is granted, the ITC must report its
findings to the President within 180 days of the petition
filing. After submission, the ITC must also release its
findings (business confidential information redacted) in the
Safeguards: Section 201 of the Trade Act of 1974
After receiving the ITC’s report, the President has 60 days
to decide which, if any, of the ITC’s recommendations to
implement. The deadline may be extended another 15 days
if the President requests additional information from the
ITC. The President may opt to implement the ITC’s
recommendations, modify them, or do nothing. When
making a determination under Section 201, the President
must consider the:
recommendations and report of the ITC;
degree to which workers and firms are already
benefiting from adjustment assistance and worker
industry’s efforts (including proposals outlined in the
adjustment plan) to make a positive adjustment to
probable effectiveness of the ITC’s proposed actions to
facilitate the industry’s positive adjustment;
short- and long-term economic and social costs of the
actions as opposed to the potential benefits; and
position of the domestic industry in the U.S. economy.
The President must also weigh U.S. national economic and
security interests, including the proposed remedy’s possible
impact on U.S. consumers and on other U.S. industries. If
the President decides to impose a remedy, he has several
options. He may:
After the President receives the ITC review and consults
with the Secretaries of Commerce and Labor, he may
modify, reduce, or terminate the action if he determines that
the industry has not made adequate efforts toward positive
adjustment or if the action is no longer effective due to
economic circumstances. The President may also terminate
or change the remedy if the industry petitions him to do so
on the basis of positive adjustment to import competition.
Section 201 Actions
The ITC conducted 75 Section 201 investigations between
1975 and 2018. There were no new Section 201
investigations initiated between 2001 and the cases initiated
in the Trump Administration. In these investigations, the
ITC determined in the negative in 33 cases (including 3 tie
votes for which the President accepted the ITC’s negative
determination, meaning that the investigation ended). The
President did not grant relief in 14 cases. The 28 times in
which the President granted relief, it was in the form of
tariff increases (9), adjustment assistance (6), tariff-rate or
import quotas (3), marketing agreements (1), combinations
of these actions (6); and in 3 instances, more open-ended
types of relief (voluntary restraint agreement, income
supports, retraining/relocation of workers).
Figure 2. Section 201 Outcomes, 1975-2018
proclaim a tariff, tariff increase, tariff-rate quota, or
quota on imports;
implement adjustment measures for U.S. firms and
negotiate and implement agreements limiting exports
with other countries;
proclaim procedures for the auction of import licenses;
initiate international negotiations;
submit legislative proposals to Congress;
take any other actions under the President’s legal
use any combination of these actions.
On the day the President takes action (or decides to take no
action) under Section 201, he is required to report to
Congress in writing, describing the action and the reasons
for it. If the President’s action differs from the ITC’s
recommendation, or if the President opts to take no action,
Congress may enact a joint resolution of disapproval within
90 days of receiving the President’s report. If a resolution is
enacted, the ITC’s recommendation becomes the remedy,
and the President must proclaim it within 30 days.
Duration and Review
The President may grant import relief for an initial period
of up to four years and extend it one or more times, up to a
maximum of eight years. The ITC must monitor Section
201 actions as long as they are in effect, especially with
respect to the efforts and progress of the domestic industry
and workers to adjust positively to import competition. If
the initial period of the action exceeds three years, the ITC
is also required to submit a midterm review to the President
Source: CRS Chart based on GAO and Federal Register documents.
In the President’s determination on solar cells and modules,
he directed the USTR to establish procedures for excluding
particular products from the safeguard measure based on
requests from the public. Based on procedures announced
on February 14, 2018, in September 2018 the USTR
excluded several products from the safeguard measure,
including off-grid panels of 45 watts or less; and flexible
and semi-flexible panels generally used on boats and RVs.
On May 14, 2018, South Korea requested WTO
consultations with the United States regarding both of the
U.S.-implemented safeguards on washing machines
(DS546) and solar products (DS545), and on August 16,
formally requested that WTO dispute settlement panels be
established. On August 14, 2018, China requested
consultations with the United States on the safeguard on
solar products (DS562).
Vivian C. Jones, Specialist in International Trade and
Safeguards: Section 201 of the Trade Act of 1974
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
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