On May 6, 2020, U.S. Secretary of Commerce Wilbur Ross announced that the Commerce will initiate an investigation to examine whether imports of mobile cranes were threatening to impair the national security. Commerce will conduct an examination into both the quantities or circumstances of mobile crane imports.
Section 232 investigations are conducted under Section 232 of the Trade Expansion Act of 1962 and authorizes the President of the United States, through tariffs or other means, to adjust the imports of goods or materials from other countries if it deems the quantity or circumstances surrounding these imports threaten national security.
This new investigation was initiated after the filing of a petition by domestic producer, The Manitowoc Company, Inc. (Manitowoc), on December 19, 2019, requesting that the Department of Commerce launch an investigation into mobile crane imports under Section 232 of the Trade Expansion Act of 1962, as amended. Similar to all other 232 investigations, this one will also be conducted by Commerce’s Bureau of Industry and Security. Commerce in its announcement stated that it will be providing an opportunity for public comment once the initiation is published in the Federal Register.
Manitowoc’s petition alleges that increased imports of low-priced mobile cranes, particularly from Germany, Austria, and Japan, and intellectual property (IP) infringement by foreign competition, have harmed the domestic mobile crane manufacturing industry. The Department of Homeland Security has identified mobile cranes as a critical industry because of their extensive use in national defense applications, as well as in critical infrastructure sectors.
While the text of the petition has yet to be made available to the public for review, according to Commerce’s press release the “petitioner claims the low-priced imports and IP infringement resulted in the closure of one of its two production facilities in the United States and eliminated hundreds of skilled manufacturing jobs in Wisconsin.” In addition, Manitowoc alleges that imports have increased “152% between 2014 and 2019.” This increase in imports coupled with an earlier 2015 finding that a Chinese crane manufacturer “misappropriated six trade secrets and infringed on a patent” which resulted in the ITC banning the sale of a Chinese crane in the United States led to the filing of the case.
Nithya Nagarajan is a Washington-based partner with the law firm Husch Blackwell LLP. She practices in the International Trade & Supply Chain group of the firm’s Technology, Manufacturing & Transportation industry team.