Mar 15 2021
Bipartisan Legislation Requires the Department of Defense, Rather than the Department of Commerce, to Justify National Security Basis for New Tariffs Under Section 232
WASHINGTON, D.C. – U.S. Senators Rob Portman (R-OH), Dianne Feinstein (D-CA), Joni Ernst (R-IA), Kyrsten Sinema (D-AZ), Deb Fischer (R-NE), Roger Wicker (R-MS), and Todd Young (R-IN) today introduced the Trade Security Act, legislation that will reform Section 232 of the Trade Expansion Act of 1962 to better align the statute with its original intent as a trade remedy tool for the president and Congress to respond to genuine threats to national security. In keeping with the original intent of Section 232, this bill makes common-sense reforms that require the Department of Defense to justify the national security basis for new tariffs under Section 232 and increase congressional oversight of this process. The text of the bill is here and a brief summary is below.
“We must hold countries that violate our trade laws accountable, but we must do so in a way that protects American jobs and strengthens the U.S. economy,” said Senator Portman. “I originally introduced this bill over concerns regarding the previous administration’s intent to misuse Section 232 statute to impose tariffs on automobiles and auto parts, which would have a devastating impact on Ohio jobs and the U.S. economy as a whole. This bipartisan legislation preserves this trade tool while properly placing the national security designation at the Department of Defense and expanding the role of Congress in the process. As a former U.S. Trade Representative, I know that misusing our trade tools not only hurts our exports and our manufacturers, but also our consumers, so I urge my colleagues to support this bipartisan legislation.”
“Preventing harmful tariffs caused by unnecessary trade wars will save Arizona jobs and protect Arizona families and businesses from higher prices,” said Senator Sinema.
“When bad actors abuse and take advantage of our trade policies in a way that threatens our national security, we need to hold these countries accountable,” said Senator Ernst. “The Department of Defense, not the Department of Commerce, should evaluate and verify the national security basis for Section 232 tariffs. This bipartisan legislation will increase congressional oversight, and in turn, help the president make decisions that support American jobs while protecting our national security.”
“This bipartisan legislation would restore Congress’ trade oversight role and ensure that the Department of Defense justifies the national security needs of tariffs imposed under Section 232,” said Senator Fischer.
“Indiana is the most manufacturing-intensive state in the country, and tariffs can detrimentally impact Hoosier farmers and manufacturers if wrongly utilized. During this pandemic that has disrupted our domestic supply chains, we need to be especially vigilant about how Section 232 is used. I’ll continue working to ensure Hoosiers have a seat at the table for future trade discussions,” said Senator Young.
NOTE: The Trade Security Act reforms the Section 232 statute to ensure that (1) any Section 232 actions are based on a national security determination by the Department of Defense; and (2) Congress has a larger role to play in 232 actions. Specifically, this bill will:
- Bifurcate the existing Section 232 process into an investigation phase, led by the Department of Defense, and a remedy phase, led by the Department of Commerce. Splitting these responsibilities, while guaranteeing consultation between the two departments at all stages of the process, plays to each department’s strengths to ensure that the statute is used for genuine national security purposes.
- Require the Department of Defense – instead of the Department of Commerce – to justify the national security basis for new tariffs under Section 232 and make the determination about the national security threat posed by imports of certain products. If a threat is found, the Department of Defense would send its report to the president. In the event that the president desires to take action based on the finding of a national security threat, the president would then direct the Secretary of Commerce, in consultation with the Secretary of Defense and the U.S. Trade Representative, to develop recommendations for how to respond to the threat. After receiving the recommendations of the Secretary of Commerce, the president would decide whether to take action.
- Increase the role of Congress in the Section 232 process by expanding the process whereby Congress can disapprove of a Section 232 action by passing a joint resolution of disapproval. Currently, Section 232 contains a disapproval resolution process limited only to the disapproval of actions on oil imports, which was inserted into Section 232 in 1980 by Congress in response to concerns about the misuse of the statute. This bill would expand the use of that disapproval resolution process to all types of products. The reformed disapproval process will only apply to future Section 232 actions.
- Require consultation with Congress throughout the Section 232 process.