Section 232 Investigations

U.S. Reps. Terri Sewell (D-AL) and Fred Upton (R-MI) on Wednesday introduced legislation (H.R. 1710) that would preclude President Trump from imposing  Section 232 tariffs on imported automobiles and automotive parts until the U.S. International Trade Commission (USITC) conducts “a study of the economic well-being, health, and vitality of the United States auto-motive

In response to Congressional concerns, the U.S. Government Accountability Office (“GAO”) has agreed to review the process by which the U.S. Department of Commerce (“Commerce”) has been processing steel and aluminum tariff exclusion requests.  On March 8, 2018, President Trump imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum

On October 15, 2018, chief Mexican trade negotiator Jesus Seade indicated that the United States is seeking to replace Section 232 tariffs on Mexican steel with an export quota program.  Seade stated that a deal regarding any potential export quotas on Mexican steel must be reached in the coming weeks, prior to the December, 1, 2018 inauguration of new Mexican President Andres Manuel Lopez Obrador.

This announcement was issued just days after the trilateral trade agreement, the U.S.-Mexico-Canada Agreement (“USMCA”) was reached among the United States, Canada, and Mexico.  Notably, the Section 232 tariffs, imposed in June on the basis of national security pursuant to the Trade Expansion Act of 1962, remain in place for both Mexico and Canada despite the USMCA agreement being finalized.

As of June 1, 2018, imports of Mexican steel became subject to a 25 percent duty, while aluminum shipments are subject to a 10 percent duty.  Certain countries, including Argentina, Brazil and South Korea, have already negotiated export quotas to nullify the Section 232 duties.  For example, South Korean officials agreed in March to cut steel exports by 30 percent of the 2015-2017 average.
Continue Reading Export Quotas in Mexico’s Future

This week the Government of Canada announced its intent to impose restrictions on imports of seven classes of steel products to mitigate harm caused by “the diversion of foreign steel products into Canada.”  See the News Release dated Oct. 11, 2018,  and Notice of Commencement of Safeguard Inquiry.

The seven classes include wire rod; stainless steel wire; hot-rolled sheet; heavy plate; energy tubular; pre-painted steel; and concrete reinforcing bar.

These “safeguard measures” were reportedly prompted by complaints from Canada’s steel industry that U.S. Section 232 tariffs on steel and aluminum have resulted in shipments of cheap steel to be diverted to Canada from the U.S., and follows the country’s countermeasures imposed on July 1st applying tariffs on over $12 billion worth of U.S. goods in response to those tariffs.

Notably, the safeguards do not apply to goods originating in and imported from the U.S., Chile and Israel.  However imports of energy tubular and wire rod from Mexico “are within the scope of the Tribunal’s inquiry.”
Continue Reading Canada to Impose Safeguard Measures on Steel Imports

On Wednesday, July 18, the Department of Commerce announced that it would begin investigating the effects of uranium imports on the national security interests of the United States.  The investigation will be conducted under Section 232 of the Trade Expansion Act of 1962.  Two U.S. uranium producers – Ur-Energy and Energy Fuels Resources Inc. – petitioned Commerce in January 2018 to open the investigation.

According to the petitioners, a domestic supply of uranium is essential to national defense, as uranium is critical to military applications and a significant portion of electricity for the U.S. power grid.  Petitioners assert that they have struggled financially to compete with uranium imports from countries like Russia, Kazakhstan, Uzbekistan, and China that have targeted the U.S. market.  The petition states that imports have grown dramatically to capture almost 80% of domestic uranium demand, while U.S. producers have been forced to idle production and lay off workers.  Petitioners note that six U.S. nuclear reactors – required to enrich uranium for defense purposes – have closed since 2013 and another eight are scheduled to close between 2018 and 2025.  In a statement made regarding initiation of the investigation, Secretary of Commerce Wilbur Ross cited the fact that “U.S. uranium production had been 49 percent of U.S. requirements in 1987.  Today, U.S. uranium production has dropped to only five percent of U.S. requirements.”

Commerce has 270 days to submit a report to President Trump as to whether uranium imports threaten to impair U.S. national security.  If Commerce reaches an affirmative conclusion, the president is authorized to take actions deemed “necessary to adjust the imports of such article” to address the harm, including by imposing tariffs or other import restrictions, or through indirect action such as domestic industry assistance.  The two petitioning companies have called for a quota on uranium imports that would reserve 25% of the U.S. nuclear market for domestic production, and domestic procurement rules that would require the government to purchase U.S.-sourced uranium.
Continue Reading Commerce Initiates National Security Investigation Into Uranium Imports

On May 23, 2018, Commerce Secretary Ross initiated an investigation into whether imports into the United States of automobiles and auto parts threaten to impair the national security.  A link to the press release announcing the initiation of the investigation is available here.

As it did during its recent 232 investigations concerning U.S. imports

On Friday, February 16, 2018, Secretary Ross released public versions of the U.S. Department of Commerce’s reports concerning the agency’s section 232 investigations into the impact on national security of steel and aluminum imports. As a result of its investigations, the Department of Commerce has determined that imports of steel and aluminum “threaten to impair the national security.”

The Secretary’s press release presents the agency’s key findings and lists the agency’s various recommended remedies.  With respect to steel imports, the Department of Commerce recommends three alternative options to the President:

  1. A global tariff of at least 24% on all steel imports from all countries, or
  2. A tariff of at least 53% on all steel imports from 12 countries (Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam) with a quota by product on steel imports from all other countries equal to 100% of their 2017 exports to the United States, or
  3. A quota on all steel products from all countries equal to 63% of each country’s 2017 exports to the United States.

With respect to aluminum imports, the Department of Commerce recommends three alternative options to the President:
Continue Reading Commerce Secretary Releases Steel and Aluminum 232 Reports, Recommends Remedies

Yesterday evening the Commerce Department sent to the White House its findings in the Section 232 national security investigation on steel imports.  The much anticipated report was originally due to be issued last year, but faced several delays.  The President now has the authority to decide whether to accept or reject the Commerce Department’s findings

Commerce Secretary Ross and the Department of Commerce’s Bureau of Industry and Security held a public hearing on Thursday, June 22, 2017 in the ongoing Section 232 investigation into whether aluminum imports are a threat to U.S. national security.

Witness testimony covered several topics including the negative effects of China’s aluminum overcapacity, the coverage and