Section 232 – Origins and Use XIV SYMPOSIUM ON INTERNATIONAL TRADE Terence P. Stewart Managing Partner Law Offices of Stewart & Stewart 2100 M Street, N.W. Washington, D.C. 20037 tstewart@stewartlaw.com

Text: Section 232 Upon request or its own motion, the Secretary of Commerce shall initiate and conduct an investigation to determine the effects on the national security of imports of the article which is the subject of such request or motion. 19 U.S.C. § 1862(b)(1)(A). If the report by the Secretary finds that imports of the article threaten national security, the President shall determine what action, if any, to take to adjust the imports of the article threatening to impair national security. 19 U.S.C. § 1862(c).

Section 232 Process Source: Rachel F. Fefer et al., Cong. Research Serv., R45249, Section 232 Investigations: Overview and Issues for Congress 31-35 (2018).

National Security Considerations Close relation of the economic welfare to . . . national security; Impact of foreign competition on the economic welfare of individual domestic industries; Substantial unemployment; Decrease in revenues of government; Loss of skills or investment; Other serious effects resulting from the displacement of any domestic products by excessive imports. 19 U.S.C. § 1862(d).

The Legislative Origins of Section 232 Trade Expansion Act of 1962 Trade Agreements Extension Acts of 1954, 1955, and 1958 Comprise the building blocks of the current statute Legislative history shows Broad grant of authority to the President Broad understanding of national security

The Legislative Origins of Section 232 Trade Agreements Extension Act of 1954 Prohibited President from reducing duties where import threatened “domestic production needed for national defense”

The Legislative Origins of Section 232 Trade Agreements Extension Act of 1955 (1) “Office of Defense Mobilization” to advise President of national security threats arising from imports; and (2) President to order investigation and import adjustments

The Legislative Origins of Section 232 Trade Agreements Extension Act of 1955 Despite problems for specific industries, language was kept broad

Legislative History: Section 232 The Trade Agreements Extension Act of 1958: Authority extended again with stated intent to provide: (1) “Unquestioned authority” to the President; and (2) A “fast-moving vehicle for guarding . . . national security” Broad concept of national security

Use of Section 232 Total of 30 Section 232 investigations since 1963 27 completed 11 positive 16 negative 1 terminated 2 in process (autos; uranium) Only 9 investigations since 1988 Only 8 investigations have resulted in presidential action of some kind Only 2 investigations have resulted in additional tariffs (steel; aluminum) Source: Rachel F. Fefer et al., Cong. Research Serv., R45249, Section 232 Investigations: Overview and Issues for Congress 31-35 (2018).

Use of Section 232 Source: Rachel F. Fefer et al., Cong. Research Serv., R45249, Section 232 Investigations: Overview and Issues for Congress 5 (2018).

Use of Section 232 Prior uses of Section 232 have resulted in modest changes Antifriction Bearings (1987) Commerce found potential threat but deferred determination to see outcome of Federal Acquisition Regulation requiring domestic procurement of all defense-related bearings. Machine Part Tools (1986) Despite Commerce’s recommendation to ban 90% of imports, VRAs were sought with West Germany, Switzerland, Taiwan, and Japan.

Conclusion Administration’s current use of Section 232 in line with text and history of the statute; But much more aggressive in reach than historical application.