Section 232 (Auto Industry)

On February 15, 2019, President Trump signed the Consolidated Appropriations Act, 2019 (Act) that fully funds the government for the remainder of the fiscal year ending on September 30, 2019. With Congress and the president agreeing on these appropriations, a second partial government shutdown was averted. Included in the Act is a provision authorizing additional funding for the Department of Commerce’s Bureau of Industry and Security (BIS) to support the Section 232 steel and aluminum product exclusion request process. $4.55 million in funding has been designated through September 30, 2019 for contractor support for the review and processing of the overwhelming number of product exclusion requests that have been filed in these investigations. Further, in the explanatory statement accompanying the Act, BIS will now be required to provide quarterly reports to relevant congressional committees providing updates on the implementation of the exclusion process. These reports must include:

  1. the number of exclusion requests received;
  2. the number of exclusion requests approved and denied;
  3. the status of efforts to assist small- and medium-sized businesses in navigating the exclusion process;
  4. department-wide staffing levels for the exclusion process, including information on any staff detailed to complete this task; and
  5. department-wide funding by source appropriation and object class for costs undertaken to process the exclusions.

While the Office of the U.S. Trade Representative (USTR) received no additional funding in the Act for its review and processing of the Section 301 China-related tariff exclusion request process, the explanatory statement requires USTR to initiate an exclusion request process for the third round of tariffs implemented on September 24, 2018 involving $200 billion in Chinese products imported into the United States (see Trump and Trade Update of September 19, 2018). In stating that “[i]t is concerning that there is no exclusion process for goods subject to tariffs in round 3 of the Section 301 proceedings, as was done in the first two rounds,” Congress notified USTR to “establish an exclusion process” for these tariffs within 30 days of enactment of this Act (i.e., by March 17, 2019). Congress instructed USTR to follow the same procedures established for the exclusion request process of the prior two lists of China tariffs. USTR is also required to consult with relevant congressional committees concerning the nature and timing of this exclusion process and the status of the process.

As reported in our post of January 25, 2019, members of the 116th session of Congress are seeking ways to address President Donald Trump’s authority to unilaterally impose tariffs under various statutes. This trend continued on January 30, 2019, with the bipartisan introduction of the Bicameral Congressional Trade Authority Act. Introduced by Sens. Mark Warner (D-VA) and Pat Toomey (R-PA), this bill would restore to Congress its Article I constitutional authority over foreign trade and commerce, specifically focusing on tariffs implemented under the claim of “national security.” The senators stated that recent Trump administration Section 232 actions have been economically disruptive and have damaged U.S. relationships with its allies, including Mexico, Canada, Japan, the EU and India. Continue Reading Additional Legislation Introduced in Congress Seeks to Curtail Executive Branch’s Authority to Implement Section 232 Tariffs

International trade and international trade disputes were a predominant focus of President Trump and his trade officials throughout 2018. Thompson Hine’s Trump and Trade team has prepared a slide presentation to provide our readers with a broad overview of the most significant trade actions taken by the Trump administration last year. From the renegotiation of the North America Free Trade Agreement (NAFTA), which is now the U.S.-Mexico-Canada Agreement (USMCA), to the many ongoing trade actions involving imports of steel, aluminum and products from China, it was a busy year. This overview concisely presents details and the current status of the president’s primary trade activities.

The presentation includes information on the current status of President Trump’s major trade actions, including NAFTA/USMCA negotiations, the U.S.-Korea Free Trade Agreement, and other bilateral trade negotiations with Japan, the European Union and the United Kingdom. It also provides details on major trade and tariff actions occurring in 2018, such as the Section 232 steel/aluminum tariffs, the Section 232 automobile and automobile parts investigation, and the Section 301 China-related tariffs.

We invite you to stay abreast of continuing developments in 2019 via our blog, TrumpandTrade.com. To receive an email notification whenever a new post is published, please subscribe to the blog.

Happy new year!

On May 23, 2018, Secretary of Commerce Wilbur Ross announced the initiation of an investigation to determine the effects on the national security of imports of automobiles – including cars, SUVs, vans and light trucks – and automotive parts. See Thompson Hine International Trade Update, dated June 1, 2018. At that time, the Department of Commerce established certain deadlines for submitting comments and for requesting to appear at a public hearing. In a June 21, 2018 Federal Register notice, the department extended the public comment period to June 29, 2018 and the rebuttal period to July 13, 2018. Requests to appear at the hearing are now due June 29, 2018. The hearing dates of July 19 and 20, 2018 remain unchanged.

Key Notes:

  • On May 23, 2018, the Department of Commerce self initiated a Section 232 national security investigation concerning the imports of automobiles and automotive parts.
  • A formal docket has been opened for the submission of public comments and requests to appear at a public hearing July 19-20, 2018.
  • The Department of Commerce has 270 days to issue its findings and submit a report to the president.

View the entire bulletin in HTML or PDF format. 

Secretary of Commerce Wilbur Ross, at the direction of President Donald Trump, has initiated an investigation to determine whether imports of automobiles, including SUVs, vans and light trucks, and automotive parts into the United States threaten to impair the national security as defined in Section 232 of the Trade Expansion Act of 1962. “There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry,” said Secretary Ross. “The Department of Commerce will conduct a thorough, fair, and transparent investigation into whether such imports are weakening our internal economy and may impair the national security.” President Trump stated that, “Core industries such as automobiles and automotive parts are critical to our strength as a Nation.”

According to Commerce, during the past 20 years, imports of passenger vehicles have grown from 32 percent of cars sold in the United States to 48 percent. From 1990 to 2017, employment in motor vehicle production in the United States declined by 22 percent. The investigation will consider whether the decline of domestic automobile and automotive parts production threatens to weaken the internal economy of the United States by potentially reducing research, development and jobs for skilled workers in connected vehicle systems, autonomous vehicles, fuel cells, electric motors and storage, advanced manufacturing processes, and other cutting-edge technologies.

A formal notice of the investigation setting forth the scope and schedule will be published in the Federal Register in the near future.