In Support of Iowa Jobs, Ernst Proposes Reforms to National Security Tariff Process

Bipartisan legislation would require the Department of Defense to justify national security basis for new tariffs under Section 232

WASHINGTON – U.S. Senator Joni Ernst (R-IA) and a bipartisan group of lawmakers introduced legislation to reform the process for an administration to issue tariffs on the basis of national security threats to better align with the original intent of the law and to increase congressional oversight of the process.

“When bad actors abuse and take advantage of our trade policies in a way that threatens our national security, the president needs to have tools available—such as tariffs under Section 232—to hold them accountable. However, the Department of Defense, not the Department of Commerce, should evaluate and verify the national security basis for these tariffs. Increasing congressional oversight will help the president make decisions that support American jobs while protecting our national security,” said Senator Joni Ernst.

The Trade Security Act would require the Department of Defense, rather than the Department of Commerce, to justify the national security basis for new tariffs under Section 232 of the Trade Expansion Act of 1962.

A bipartisan group of senators, including Senators Rob Portman (R-OH), Doug Jones (D-AL), Lamar Alexander (R-TN), Dianne Feinstein (D-CA), Deb Fischer (R-NE), Kyrsten Sinema (D-AZ) and Todd Young (R-IN), introduced the bill. Representatives Ron Kind (D-WI), Jackie Walorski (R-IN), Terri Sewell (D-AL) and Darrin LaHood (R-IL) introduced a companion version in the U.S. House of Representatives.

“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 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 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.”

“When it comes to trade, our first priority should always be to protect American jobs and grow our own economy,” said Senator Jones.  “I agree we need to hold bad actors like China accountable for their actions, but we cannot do so at the expense of hard-working Americans who are the backbone of important industries like auto manufacturing. If a trading partner is suspected of threatening our national security, we need our top defense experts to investigate that claim and make an informed recommendation. I am proud to join Senators Portman and Ernst to once again introduce this legislation to reform the Section 232 process and help the Administration make better-informed decisions that support American jobs.”

“No state would be more damaged by these tariffs than Tennessee — in many ways we are the nation's number one auto state,” said Senator Alexander.  “Tariffs are the constitutional responsibility of Congress, and this bipartisan bill would increase Congressional oversight over these tariffs.”

“Congress gave the president Section 232 authority to quickly respond to national security threats, not to pick political fights with our trading partners,” Senator Feinstein said.  “In California, farmers and manufacturers are being unnecessarily hurt by this multi-front trade war. It’s time for Congress to reassert its constitutional authority to regulate trade and reform Section 232 to ensure it’s used only for true national security purposes.”

“While I support modernizing our trade agreements, agriculture producers in Nebraska and across the country continue to face uncertainty as a result of tariffs,” said Senator Fischer.  “Agriculture is the backbone of Nebraska’s economy, and we must make sure our producers and manufacturers have the market access they need to prosper. That’s why I’m pleased to join my colleagues on this bipartisan legislation that maintains the administration’s ability to use trade tools to protect national security while restoring Congress’s oversight role. This legislation will ensure that the Department of Defense justifies the national security need for any tariffs imposed under Section 232.”

“This bipartisan bill will help prevent unnecessary trade wars that hurt Arizona's economy,” said Senator Sinema.

“Indiana is the most manufacturing intensive state in the country, and Hoosiers continually express their desire for Congress to exert its Constitutional role in the 232 process, which has the ability to detrimentally impact Hoosier farmers and manufacturers if wrongly utilized. I’ll continue working with Senator Portman and the Finance Committee to ensure Hoosiers have a seat at the table for future trade discussions,” said Senator Young.

Background:

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.

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