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1 1 (June 29, 2018)

handle is hein.crs/govzbi0001 and id is 1 raw text is: Section 232 of the Trade Expansion Act of 1962 Background On March 8, 2018, the President announced tariffs on imports of steel and aluminum after Department of Commerce (Commerce) investigations determined that current imports threaten to impair national security. Such investigations are carried out pursuant to Sec. 232 of the Trade Expansion Act of 1962 (19 U.S.C. § 1862, as amended), sometimes called the national security clause. The last time a president imposed tariffs or other trade restrictions under Section 232 was in 1986, based on a 1983 investigation into imports of machine tools. The use of Section 232 by the Trump Administration has generated active debate at the multilateral level and in Congress, including legislative initiatives to amend the congressional delegation of authority under Section 232 to the President. Section 232 Process Section 232 allows any department or agency head, or any interested party, to request Commerce to initiate an investigation to ascertain the effect of specific imports on the national security of the United States. Commerce may also self-initiate an investigation. Investigation. Once a Section 232 investigation is requested in writing, Commerce must immediately initiate an appropriate investigation to determine the effects on the national security of the subject imports. After consulting with the Secretary of Defense, other appropriate officers of the United States, and the public, if appropriate, Commerce has 270 days from the initiation date to prepare a report advising the President whether the targeted product is being imported in certain quantities or under such circumstances to impair U.S. national security, and to provide recommendations for action or inaction based on the findings. The Bureau of Industry and Security (BIS) at Commerce conducts the investigation based on federal regulations codified in 15 CFR § 705 (Effect of Imported Articles on the National Security). In terms of national security, Commerce considers: (1) existing domestic production of the product; (2) future capacity needed; (3) the manpower, raw materials, production equipment, facilities, and other supplies needed to meet projected national defense requirements; (4) growth requirements, including the investment, exploration, and development to meet them; and (5) any other relevant factors. Regarding the subject imports, Commerce must consider: (1) the impact of foreign competition on the domestic industry deemed essential for national security; (2) the effects that the displacement of domestic products cause, including substantial unemployment, decreases in public revenue, loss of investment, special skills, or production capacity; and (3) any other relevant factors that are causing, Updated June 29, 2018 or will cause a weakening in the national economy. Commerce may request public comments or hold hearings, if appropriate. An Executive Summary of the final report (excluding any confidential or classified material) must be published in the Federal Register. Presidential Action and Notification. If Commerce finds in the negative, Commerce informs the President and no further action is required. If Commerce determines in the affirmative, the President, upon receipt of the report, has 90 days to (1) determine whether he concurs with its findings; and (2) if the President concurs, determine the nature and duration of the action to be taken to adjust the subject imports. The President may decide to impose tariffs or quotas to offset the adverse effect, without any limits on the duration on tariff or quota amounts. The President has discretion to exclude specific product categories, countries, or provide other exemptions. After making a determination, the President must implement the action within 15 days, and submit a written statement to Congress explaining the actions or inaction within 30 days. The President must also publish his determination in the Federal Register. Figure I. Section 232 Investigation Process Source: CRS graphic based on 19 U.S.C. § 1862. Prior Section 232 Actions Prior to the Trump Administration, 26 Section 232 national security investigations were initiated, beginning in 1963. Previous investigations of manufactured goods were more tightly focused on specific products, including antifriction bearings and gears and gearing products. Of the 26 cases initiated (excluding Trump Administration investigations), Commerce made negative determinations 62% of the time. Prior to 2018, when Commerce made positive determinations, the President recommended action six times (Figure 2). In one case, the President sought voluntary htftps:/crsreports.con, -- -q Investigation requested. Secretary of Commerce investigates. Investigation includes consultation with .27,days DOD and may include others. Secretary ofCommerce reportsfindings and recommendations to the President. Ifi~ndhhgs fffindingsare are negativeno affirmaive, furtberacion 90days requre President decides whether to accept findings and recommendations. 30days President Implements action (if any). President Informs Congress.

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