Section 232 Tariffs

Commerce Secretary Wilbur Ross on Jan. 19 formally submitted to President Donald Trump the results of the department's Section 232 investigation on the national security effects of imports of wrought and unwrought aluminum, Commerce said in a Jan. 22 news release. Submission of the report starts a 90-day clock for Trump to decide whether to impose any import restrictions under the investigation, Commerce said. The recommendations, along with those submitted Jan. 11 in an ongoing Section 232 investigation on steel (see 1801120023), include a “wide range of options” from measures “specifically targeting ‘bad actors’” in the steel and aluminum industries to broader tariffs on steel and aluminum, according to a report from CNBC.

The National Taxpayers Union (NTU) in a Dec. 12 letter requested a halt to the Commerce Department-led Section 232 investigations into the national security impacts of steel and aluminum imports, saying any trade actions activated pursuant to the probe would be a “misuse of policy” intended for genuine emergencies, hurt U.S. alliances and break “longstanding precedent.” “Providing the military with dependable metal is important,” the letter says. “However, the amount of steel and aluminum used for defense is a relatively small portion of the total demand, given that the defense industry consumes roughly 1 percent of all aluminum and 3 percent of steel.” NTU also called China the “scapegoat” of U.S. economic woes, adding that the nation “only” accounts for 4 percent of imported steel and 6 percent of imported aluminum. Imposing tariffs would increase costs for manufacturers who rely on lower-priced steel and aluminum imports, and in turn, raise consumer costs for such goods as automobiles, housing, soda cans and dishwashers, the NTU said. Commerce didn't comment.

Senate Minority Leader Chuck Schumer, D-N.Y., will block the nominations of Gilbert Kaplan to be under secretary of commerce for international trade and Nazakhtar Nikakhtar to be an assistant secretary of commerce for industry and analysis at the International Trade Administration until the Commerce Department gives more information on the progress of metal import reviews, Schumer said in a statement. The Trump administration launched Section 232 investigations in April into whether steel and aluminum imports are a threat to national security, and affirmative findings could result in tariffs or quotas on those products. The investigations, led by the Commerce Department, remain under interagency review after Commerce indefinitely postponed its self-imposed deadline of June 30 for concluding the steel investigation (see 1705240034).

Defense officials in the Trump administration are treading cautiously in determining whether to take any tariff or quota action against other countries, Under Secretary of Defense for Acquisition, Technology, and Logistics Ellen Lord said Oct. 4 during the Bureau of Industry and Security annual export control policy conference. The administration launched Section 232 investigations in April into whether steel and aluminum imports are a threat to national security, and affirmative findings could result in tariffs or quotas on those products. The investigations, led by the Commerce Department, remain under interagency review after Commerce indefinitely postponed its self-imposed deadline of June 30 for concluding the steel investigation (see 1705240034).

President Donald Trump on Aug. 14 issued a memorandum directing U.S. Trade Representative Robert Lighthizer to determine whether to investigate Chinese “laws, policies, practices, or actions” that might be harming U.S. intellectual property rights, innovation or technological development. The memo pointed to language in the Trade Act of 1974 that requires the Office of the U.S. Trade Representative to undertake several requirements in self-initiating an investigation under Section 301 of that law. Section 301 gives the president broad authority, including import duties, to retaliate against restrictions found to “burden or restrict” U.S. commerce.

Twenty-three House lawmakers signed a letter this week to President Donald Trump urging him to exempt tinplate steel and aluminum for food packaging in any import restrictions initiated to the administration’s ongoing Section 232 national security reviews of steel and aluminum imports, the office of Rep. Don Bacon, R-Neb., announced. “The domestic canned food supply chain and flexible packaging industry generates more than $100 billion in total economic activity in the U.S. and employs tens of thousands of American workers,” Bacon said in a statement. “This industry provides some of the safest, most affordable food available to consumers today. We will continue to keep pressing for what we believe is right for America and our constituents.” Tinplate steel composes about 60 percent of the cost of a can, meaning a tariff even as low as 5 percent would raise the cost of goods by 4.2 cents each, “inevitably” passing along higher expenses to consumers, the announcement says.

Nine domestic industry groups urged Commerce Secretary Wilbur Ross on July 18 to persevere with the Trump administration’s Section 232 investigations on steel and aluminum, despite “vague speculation” about trade retaliation. “Global trade has been nonreciprocal, in part, because past administrations have wrongly viewed enforcement of trade rules as protectionism even as other countries made full use of those rules,” the groups said in a July 18 letter (here). The 1994 General Agreement on Tariffs and Trade allows countries to protect national security, and the World Trade Organization system prevents any “uncontrollable trade retaliation” for using the provision. There have been no such retaliatory countermeasures leveled against nations that assess trade measures based on national security, the groups wrote.

International Trade Today is providing readers with some of the top stories for July 10-14 in case they were missed.

Lawmakers urged U.S. Trade Representative Robert Lighthizer to streamline customs procedures in the upcoming NAFTA renegotiation during a June 22 hearing at which House Republicans also joined their Democratic colleagues in calling for discretion in the Trump administration’s ongoing Section 232 metals investigations. During a House Ways and Means Committee hearing on Trump administration trade policy, Lighthizer said trade facilitation would be part of the negotiations. While acknowledging the possibility for "technical" disagreements on customs provisions, he said he “can’t imagine” that NAFTA parties would differ in "direction” on customs talks. Committee Chairman Kevin Brady, R-Texas, in his opening statement called for updates to NAFTA to reflect “modern realities” of customs barriers, digital commerce, intellectual property and state-owned enterprises, among other areas.

Twelve Democrats from the House and Senate are calling for the Trump administration to give stakeholders the opportunity to provide feedback on the Commerce Department’s ongoing Section 232 investigations on steel and aluminum imports, according to a June 20 letter they sent to Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer (here). The lawmakers also requested that the administration fully consult with Congress on its considered approach before a decision is made. “Given the significant implications these proceedings could have for jobs and economic growth across the country, it is particularly essential that the Administration provide full transparency and due process when conducting these investigations,” the lawmakers wrote. “While swift relief is vital, it need not come at the expense of due process.” If the reviews find metal imports endanger U.S. national security, the Trump administration could impose tariffs, quotas or other import restraints.