UPDATE: Threats to National Security Foiled? A Wrap Up of New Tariffs on Steel and Aluminum
Legal Sidebar
UPDATE: Threats to National Security Foiled?
A Wrap Up of New Tariffs on Steel and
Aluminum
Updated March 22, 2018
UPDATE: On March 19, 2018, the U.S. Department of Commerce (“Commerce”) issued an interim final
rule concerning product-specific exclusions from the new tariffs on certain steel and aluminum imports.
Because these requirements involve “a military or foreign affairs function of the United States,”
Commerce determined that certain requirements of the Administrative Procedure Act, such as notice of
proposed rulemaking, the opportunity for public comment, and a delayed effective date, were
inapplicable. Under the new requirements, requests for exclusions can be filed only by individuals or
organizations in the United States that use the specific steel and aluminum products covered by tariffs.
Commerce will only grant an exclusion “if an article is not produced in the United States in a sufficient
and reasonably available amount, is not produced in the United States in a satisfactory quality, or for a
specific national security consideration.” The exclusions “will generally be approved for one year.” All
exclusion requests, objections, and final responses to such requests will be available here by searching
BIS-2018-0006 for steel and BIS-2018-0002 for aluminum. Denials of such requests will likely be
challengeable in court.
The original post from March 12, 2018, is below.
In accordance with two presidential proclamations issued on March 8, 2018, new tariffs will be imposed
on imports of certain steel and aluminum products beginning on March 23, 2018. As previously discussed
in this post, the tariffs come after the U.S. Department of Commerce’s (“Commerce”) release of two
reports that detail the results of its investigations, conducted pursuant to Section 232 of the Trade
Expansion Act of 1962, on the effects on national security of (1) steel imports (the “Steel Investigation”)
and (2) aluminum imports (the “Aluminum Investigation”). In its reports, Commerce concluded that steel
and aluminum are “being imported into the United States in such quantities or under such circumstances
as to threaten to impair the national security,” thus triggering the President’s authority under the statute to
determine what “action . . . must be taken to adjust the imports of the article and its derivatives” to
address this threat. These tariffs also come about a month after the President, relying on a different statute,
proclaimed a tariff-rate quota on imports of certain solar energy related products and large residential
washers. Taken together, these new tariffs—all of which were imposed under the authority of two
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uncommonly used laws—may be indicative of the Trump Administration’s approach to addressing
perceived unfair trade practices, one that relies on less familiar laws allowing for the imposition of trade
measures in addition to the more commonly used antidumping and countervailing duty statutes.
Evaluating this new approach, some commentators have suggested the new tariffs will benefit domestic
steel and aluminum manufacturers, while others have noted the tariffs could harm downstream domestic
industries that use imported steel and aluminum as inputs. With the United States being the world’s
largest importer of steel, observers have also noted that the tariffs will likely have ramifications for the
global economy, possibly leading to retaliatory tariffs on American exports. The European Union (“EU”),
for example, has already issued a plan to counter the steel and aluminum tariffs with tariffs on a range of
U.S. steel and agricultural products, including, among others, bed linens, chewing tobacco, cranberries,
and orange juice. Other commentators have noted that, for consumers, the tariffs might lead to price
increases on goods containing these metals. To place this debate in its legal context, this Sidebar begins
with a summary of the trade measures Commerce recommended to the President upon conclusion of its
Steel and Aluminum Investigations; examines the President’s final trade actions on these imports; and
concludes with a discussion of various options for Congress. (For more background on Commerce’s Steel
and Aluminum Investigations, as well as the legal framework for Section 232 investigations, see this CRS
Legal Sidebar and this CRS Insight).
The New Measures
As detailed here, having reached final affirmative determinations in both the Steel and Aluminum
Investigations, Commerce recommended one of three measures be imposed on steel imports: (1) a tariff
of at least 24% on imports from all countries; or (2) a quota on imports from all countries equal to 63% of
each country’s 2017 United States exports; or (3) a tariff of at least 53% on imports from twelve specific
countries combined with a quota on imports from all other countries equal to 100% of each country’s
2017 United States exports. As to the first option’s recommended tariff in particular, Commerce
determined that “a 24 percent tariff on all steel imports would be expected to reduce imports by 37
percent,” thereby “enabl[ing] an 80 percent capacity utilization rate at 2017 demand levels.” As to
aluminum, Commerce also recommended one of three measures be imposed: (1) a tariff of at least 7.7%
on imports from all countries; or (2) a quota on imports from all countries equal to a maximum of 86.7%
of each country’s 2017 United States exports; or (3) a tariff of 23.6% on imports from China, Hong Kong,
Russia, Venezuela and Vietnam, combined with a quota on imports from all other countries equal to 100%
of each country’s 2017 United States exports. With regard to the proposed tariff of the first option,
Commerce determined that a 7.7% tariff “would restrict aluminum imports sufficiently to allow U.S.
primary aluminum producers to increase production by about 669,000 metric tons, bringing total
production to . . . about 80 percent of existing U.S. primary aluminum production capacity.”
In general, once Commerce has reached a final affirmative determination and made its recommendations,
case law suggests that Section 232 gives the President “a measure of discretion in determining the method
to be used to adjust imports,” indicating that the President is not strictly bound to Commerce’s proposals.
Here, the proclamations take a broader approach than Commerce’s recommendations, generally imposing
a tariff of 25% on imports of steel and 10% on imports of aluminum, from all countries except for Canada
and Mexico. The proclamations state that Canada and Mexico “present a special case,” given, among
other factors, a “shared commitment to supporting each other in addressing national security concerns,
our shared commitment to addressing global excess capacity for producing steel [and aluminum], the
physical proximity of our respective industrial bases, [and] the robust economic integration between our
countries.” Thus, the President concluded that “the necessary and appropriate means to address the threat
to the national security posed by imports of steel [and aluminum] articles from Canada and Mexico is to
continue ongoing discussions with these countries,” possibly via the ongoing renegotiation of the North
American Free Trade Agreement.
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With regard to other countries with which the United States has “a security relationship,” the
proclamations state that any such country “is welcome to discuss with the United States alternative ways
to address the threatened impairment of the national security caused by imports from that country.” Talks
between countries that might be eligible for such an exception are reportedly already underway. If such
discussions lead to “a satisfactory alternative means to address the threat to the national security such that
[the President] determine[s] that imports from that country no longer threaten to impair the national
security, [he] may remove or modify the restriction on steel [and aluminum] articles imports from that
country.” It is unclear what test would be used to determine when imports no longer threaten to impair the
national security for purposes of this provision. The criteria Commerce used during its Steel and
Aluminum Investigations, however, might be a possibility. Specifically, Commerce employed a fairly
broad definition of “national security”: “[I]n addition to the satisfaction of national defense requirements,
the term ‘national security’ can be interpreted more broadly to include the general security and welfare of
certain industries, beyond those necessary to satisfy national defense requirements that are critical to the
minimum operations of the economy and government.”
As to the types of products that will be subject to the tariffs, the new measures will take effect on the
particular product types specified in Commerce’s investigation reports. For steel, this includes certain
carbon, alloy, and stainless steel products; for aluminum, the covered products include both unwrought
aluminum and certain wrought aluminum products, such as bars, rods, wire, and foil. Importantly,
however, both proclamations authorize Commerce to provide relief from the tariffs “for any steel [or
aluminum] article determined not to be produced in the United States in a sufficient and reasonably
available amount or of a satisfactory quality” or “based upon specific national security considerations.”
Such exemptions will be provided “only after a request for exclusion is made by a directly affected party
located in the United States” and “Commerce determines that the article shall be excluded.” The
proclamations direct the Secretary of Commerce to issue procedures for such exclusion requests within
ten days of the proclamations’ issuance.
Options for Congress
Section 232 directs the President to submit to Congress a written statement of “the reasons why the
President has decided to take action” within thirty days of the date such determinations are made. While
the statute allows Congress to pass a joint resolution of disapproval of actions the President takes, this
provision is limited to instances when the President adjusts “imports of petroleum or petroleum products,”
and therefore does not apply to the Steel and Aluminum Investigations. Congress could, however, pass
other legislation. As discussed in this CRS report, “Congress is constitutionally authorized to raise
revenue through taxes, tariffs, duties, and the like, and to regulate international commerce” and “has the
accompanying authority to ‘make all Laws which shall be necessary and proper for carrying into
Execution’ these powers.” In the context of the new tariffs, Congress could pass legislation that imposes a
different trade remedy, and could also amend or repeal Section 232. Legislative efforts are reportedly
already underway, but any such action on the part of Congress would be subject to the President’s veto.
Some may wonder whether a cancellation of the President’s Proclamations might be available under the
Congressional Review Act (“CRA”), which allows Congress to overturn certain agency actions, subject to
the President’s veto. (For a discussion of the CRA generally, see these CRS products). The CRA,
however, applies to an agency “rule” that the Act requires administrative agencies (i.e., not the President)
to submit to Congress. As such, it is questionable whether this mechanism is available to counteract a
presidential proclamation of a trade measure imposed pursuant to Section 232.
It is also possible that a foreign country may challenge the President’s actions before one of the
various dispute settlement mechanisms established by trade agreements to which the United
States is a party. For example, a member of the World Trade Organization (“WTO”) could
challenge the President’s actions in a dispute before the WTO, and an adverse ruling could
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eventually lead to authorization for the prevailing country to impose retaliatory measures against
U.S. exports. However, as relevant here, the WTO’s primary agreement governing the imposition
of tariffs contains a national security exception under which its provisions will not “be construed
. . . to prevent any [member country] from taking any action which it considers necessary for the
protection of its essential security interests.” Though this exception has been invoked several
times throughout the history of the WTO and its predecessor agreement, it has yet to be
interpreted by a WTO dispute settlement panel. Accordingly, there is little guidance as to: (1)
whether a WTO panel would decide, as a threshold matter, that it has authority to evaluate
whether the United States’ invocation of the national security exception is proper; and (2) how a
panel might interpret the exception if it were invoked in a dispute before the WTO involving the
new steel and aluminum tariffs. On the other hand, a foreign country could also resort to self-
help by retaliating with its own trade measures without awaiting the outcome of a dispute
settlement proceeding. In that instance, it is unclear whether the country would follow
international trade rules, such as those governing antidumping and countervailing duties, in
pursuing such self-help measures.
Author Information
Brandon J. Murrill
Legislative Attorney
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