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Why we should still be paying attention to Section 232 tariffs -- A THREAD
Today in @NRO, @clark_packard and I detail the quiet, problematic expansion of "national security" tariffs over the past three years: https://www.nationalreview.com/2020/07/trade-policy-tariffs-congress-must-limit-abuse/
Today in @NRO, @clark_packard and I detail the quiet, problematic expansion of "national security" tariffs over the past three years: https://www.nationalreview.com/2020/07/trade-policy-tariffs-congress-must-limit-abuse/
"Section 232" of the Trade Expansion Act of 1962 allows POTUS to impose trade restrictions on imports if the Commerce Dept. conducts an investigation which concludes that those imports "threaten to impair" the national security of the United States.
As a Court of Int'l Trade judge noted last year: "[w]hat we have come to learn is that section 232 . . . provides virtually
unbridled discretion to the President with respect to the power over trade that is reserved by the
Constitution to Congress."
https://www.cit.uscourts.gov/sites/cit/files/19-37.pdf
unbridled discretion to the President with respect to the power over trade that is reserved by the
Constitution to Congress."
https://www.cit.uscourts.gov/sites/cit/files/19-37.pdf
W/r/t Sec. 232, "unbridled" discretion means:
* A broad definition of "national security" that includes terms like "weakening of our internal economy"
* No limits on duration or scope of trade restrictions
* No oversight from Congress or agencies like the ITC
* A broad definition of "national security" that includes terms like "weakening of our internal economy"
* No limits on duration or scope of trade restrictions
* No oversight from Congress or agencies like the ITC
Fortunately, most presidents have used Sec. 232 in line with the statute's intent: A Cold War-era law designed to protect the national defense.
Pre-Trump, the last time a president used Sec. 232 to restrict trade was in 1986. The most recent investigation was conducted in 2001.
Pre-Trump, the last time a president used Sec. 232 to restrict trade was in 1986. The most recent investigation was conducted in 2001.
The WH has gotten a lot of attention for three Sec. 232 investigations, all of which were self-initiated: Steel, aluminum, and autos + auto parts.
Thus far, only steel + alum have resulted in Sec. 232 tariffs, even though the DoD said the tariffs were not necessary for defense.
Thus far, only steel + alum have resulted in Sec. 232 tariffs, even though the DoD said the tariffs were not necessary for defense.
Result of the steel + alum tariffs = New taxes on $23.9B worth of steel + $15.7B worth of alum. Foreign retaliation against $9B worth of US exports (mostly Ag). Numerous cases filed against US at WTO. Est. cost to Americans = $900K *per job* saved or created in steel industry.
So we know that these tariffs are on net bad, both for economic reasons & b/c POTUS can impose them unilaterally, despite trade being a congressional power.
BUT, aside from steel, alum, & autos, the WH has also opened *five* other Sec. 232 investigations...
BUT, aside from steel, alum, & autos, the WH has also opened *five* other Sec. 232 investigations...
1/ Uranium (announced 7/18/18)
2/ Titanium sponge (3/4/19)
3/ Grain-oriented electrical steel (5/4/20)
4/ Mobile cranes (5/6/20)
5/ Vanadium (6/2/20)
2/ Titanium sponge (3/4/19)
3/ Grain-oriented electrical steel (5/4/20)
4/ Mobile cranes (5/6/20)
5/ Vanadium (6/2/20)
In all Sec. 232 cases concluded so far under Trump, Commerce has reached an "affirmative" finding of a national security threat -- demonstrating that, despite all rational evidence (e.g. BMWs don't hurt US security) -- the Dept. is willing to pave the way for new tariffs.
Put another way: In Sec. 232's 58-year history, three years under the Trump administration have resulted in:
* 24% of all Sec. 232 cases ever opened (8/34)
* 36% of all completed Sec. 232 cases resulting in an affirmative national security finding (5/14)
* 24% of all Sec. 232 cases ever opened (8/34)
* 36% of all completed Sec. 232 cases resulting in an affirmative national security finding (5/14)
This is a dramatic circumvention of Congress and US trade laws. For example, under US law, if a producer is being treated unfairly by foreign imports they are entitled to pursue anti-dumping duties through the Commerce Dept. & ITC. Sec. 232 was NOT designed for this purpose.
As I've noted before ( https://twitter.com/haliecraig/status/1257438964153286658), some of these Sec. 232 investigations were opened after prior anti-dumping petitions were not successful -- specifically, titanium sponge and grain-oriented electrical steel.
It's also worth noting that in 1989, the Commerce Dept. conducted a Sec. 232 investigation into uranium and concluded that uranium imports were *not* a threat to national security.
https://www.bis.doc.gov/index.php/documents/section-232-investigations/88-uranium-1989
https://www.bis.doc.gov/index.php/documents/section-232-investigations/88-uranium-1989
But the lack of guardrails on Sec. 232 and the current administration's willingness to use the statute has made it all too easy to open the Pandora's box of imposing protectionist measures under the guise of "national security."
With the Supreme Court's denial of cert last week in a constitutional challenge (non-delegation doctrine) to Sec. 232 steel tariffs, the only remaining option for curbing future abuse of these "national security" trade restrictions is Congress.
