Steel/aluminum tariffs under increased scrutiny

The Senate Finance Committee is considering two bills that would limit a president’s ability to impose Section 232 tariffs to protect national security. Senator Rob Portman’s (R-OH) bill would require Congress to vote to disapprove tariffs. Senator Pat Toomey’s (R-PA) bill would require Congress to vote to approve tariffs. The Toomey bill would apply retroactively, which means that current Section 232 tariffs on imported steel and aluminum could only continue if Congress votes to do so. Both bills would require that the Department of Defense (DOD), rather than the Department of Commerce (DOC), lead Section 232 investigations.

Also, the Nov. 14 deadline passed for President Trump to implement a threatened Section 232 25-percent tariff on imported vehicles and component parts. Under the Trade Expansion Act of 1962 that allows the president to tax imports that the Department of Commerce considers a threat to national security, the administration has six months after opening an investigation to implement Section 232 tariffs.

On Nov. 19, the U.S. Court of International Trade (CIT) found that President Trump previously exceeded his Section 232 authority in 2018 when he tried to double the tariff on steel imported from Turkey. According to the Court, “The president’s expansive view of his power under Section 232 is mistaken….Section 232 requires that the president not merely address a threat to national security; he must do all that, in his judgement, will eliminate it…The statute restricts the president’s power substantively by requiring the action to eliminate threats to national security caused by imports and procedurally by setting the time in which to act.”

NAFEM is a member of the Tariff Reform Coalition that is advocating for passage of Section 232 reform legislation, including:

• Congressional approval of tariffs;
• A predetermined date by which tariffs will sunset, or conclude;
• Redefining the definition of “national security” so it doesn’t simply protect a domestic industry from economic harm;
• Moving Section 232 investigations to the Department of Defense; and,
• A required notice and comment period before implementing Section 232 tariffs.

An October report from the Department of Commerce Inspector General (IG) found “a lack of transparency” has contributed to “the appearance of improper influence” in decision making on the steel and aluminum tariff-exclusion process. The IG report also found evidence of an “unofficial appeals process,” causing several members of Congress to issue press releases expressing concern.

To continue to encourage the removal of the burdensome Section 232 steel and aluminum import tariffs, NAFEM is an active member of the Coalition of American Metal Manufacturers and Users that offers numerous free resources to communicate tariff concerns to elected officials.

U.S. steel prices are currently at a three-year low due to decreased domestic and international demand.