Bipartisan Legislation Requires the Department of Defense, Rather than Department of Commerce, to Justify National Security Basis for New Tariffs Under Section 232

WASHINGTON, D.C. – U.S. Senators Rob Portman (R-OH), Doug Jones (D-AL), and Joni Ernst (R-IA) 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 powerful trade remedy tool for the president and Congress to respond to genuine threats to national security. This legislation addresses concerns that misuse of Section 232 will harm jobs and the economy and likely result in a loss of this trade remedy tool, either at the hands of a World Trade Organization dispute settlement panel or as the result of other congressional action. 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 increases congressional oversight of this process. The text of the bill is here.  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 have repeatedly expressed concerns about the misuse of the Section 232 statute to impose tariffs on automobiles and auto parts, and its impact on Ohio jobs and the U.S. economy as a whole. This bipartisan legislation maintains 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 USTR, 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.”

 

“We cannot resolve perceived trade imbalances by accusing our allies of being a threat to our national security. If a trading partner is suspected of undermining our national security, that claim needs to be thoroughly investigated by those with relevant expertise in the Department of Defense,” said Senator Jones. “Unfortunately, the current process led by the Department of Commerce has been misused to target important job-creating industries in Alabama like auto manufacturing. I’m proud to introduce this bipartisan legislation with Senator Portman that will reform the Section 232 process and help to refocus our efforts on punishing bad actors, rather than hurting American manufacturers, workers, and consumers.”

When it comes to national security, we must hold bad actors accountable,” said Senator Ernst. “I support the president’s ability to make trade deals and keep our nation secure, but the Department of Defense must justify the national security basis for new tariffs under Section 232, and we must increase congressional oversight of this process.”

NOTE: The Trade Security Act will reform the Section 232 statute and 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.