On April 19, 2017, Commerce Secretary Wilbur Ross initiated an investigation on the effects of steel imports on US national security, under Section 232 of the Trade Expansion Act of 1962. The next day, President Trump issued an executive order directing Secretary Ross to proceed with the investigation “expeditiously.”
Then on April 26, 2017 Secretary Ross initiated another Section 232 investigation, this time focusing on the effects of aluminum imports on US national security. Depending on the results of these investigations, President Trump may impose additional duties or other restrictions on aluminum and steel imports.
Section 232 investigations
The purpose of a Section 232 investigation is to determine the effects of imports on US national security. The Commerce Secretary has 270 days to present his findings to the president. If the Commerce Secretary finds that imports threaten national security, the president then has 90 days to determine whether he agrees with the Commerce Secretary’s findings and whether he will “adjust imports.”
Section 232 investigations are conducted by Commerce’s Bureau of Industry and Security (BIS). BIS considers several criteria, such as the requirements of the defense as well as civilian industries; the quantity, quality and availability of imports; and the impact of foreign competition on the domestic industry.
Section 232 investigations are rare. Prior to this month, none have been undertaken since 2001, and only 14 such investigations have been conducted since 1980. By contrast, over that same span Commerce has initiated more than 1,500 anti-dumping/countervailing duties investigations.
BIS will hold a public hearing on this investigation on Wednesday, May 24, 2017. To participate in the public hearing, interested parties must submit a written request to speak along with a summary of their oral presentation no later than Wednesday, May 17, 2017.
Comments are due one week from the public hearing on Wednesday, May 31, 2017. Interested parties may submit comments to the Department of Commerce at Steel232@bis.doc.gov.
We expect BIS to publish the schedule for the aluminum Section 232 investigation soon.
The Commerce Department is seeking comments and information regarding:
- Quantity of domestic aluminum and steel production
- Domestic aluminum and steel production needed to meet projected national defense requirements
- Capacity of domestic aluminum and steel to meet projected national defense requirements
- Existing and anticipated availability of human resources, products, raw materials, production equipment and facilities to produce aluminum and steel essential to the national defense
- Growth requirements of the domestic aluminum and steel industry to meet national defense requirements and/or requirements to assure such growth
- Impact of foreign competition on the economic welfare of the aluminum and steel industry essential to our national security
- Displacement of any domestic aluminum and steel causing substantial unemployment, decrease in the revenues of government, loss of investment or specialized skills and productive capacity, or other serious effects
- Any other relevant factors that are causing or may cause a weakening of the US economy
These Section 232 investigations reflect the Trump administration’s attempt to advance its trade agenda by using all available tools at its disposal. Aluminum and steel producers, purchasers, manufacturers, distributors and importers should consider how potential import adjustments could affect their operations and supply chains.