1. What is the purpose of a Section 232 Investigation?
Section 232 investigations are initiated to determine the effects of imports of any articles on U.S. national security. In this case, the Commerce Department is determining the effect of steel imports on the national security. Generally, steel products fall into one of the following five categories (including but not limited to): Flat products, long products, pipe and tube products, semi-finished products, and stainless products.
2. What authority is a Section 232 investigation conducted under?
Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. §1862) authorizes the Secretary of Commerce to conduct these comprehensive investigations.
3. Who initiates a Section 232 investigation?
The Secretary of Commerce initiated the Section 232 investigation on steel imports on April 19, 2017. Investigations may also be initiated based on an application from an interested party (industry, Congress) or a request from the head of any department or agency.
4. Why has the Secretary of Commerce initiated a Section 232 on steel?
The Secretary initiated the investigation on steel imports in light of the large volumes of excess global steel production and capacity – much of which results from foreign government subsidies and other unfair practices – which distort the U.S. and global steel markets. Steel is used in a variety of commercial, infrastructure and defense applications.
The Commerce Department’s January 2017 Steel Industry Executive Summary found that overall U.S. capacity utilization was 71 percent in 2016, a drop from 77.5 percent in 2014. In 2016, import penetration of steel mill products was 25.5 percent. March 2017 steel imports to the United States are 34 percent higher than those in March 2016, a dramatic increase.
U.S. Government attempts to address foreign government subsidies and other unfair practices have not ended this distortion. There are 152 antidumping and countervailing duty orders on steel products in effect and another 25 investigations underway. The United States has encouraged other countries to reduce and address the underlying causes of excess capacity in the steel market. To date, these efforts have had little practical effect, and have not substantially alleviated the negative effect global excess capacity on the United States steel industry.
5. What does a Section 232 investigation consider?
Section 232 investigations include consideration of:
- domestic production needed for projected national defense requirements;
- domestic industry’s capacity to meet those requirements;
- related human and material resources;
- the importation of goods in terms of their quantities and use;
- the close relation of national economic welfare to U.S. national security;
- loss of skills or investment, substantial unemployment and decrease in government revenue; and
- the impact of foreign competition on specific domestic industries and the impact of displacement of any domestic products by excessive imports.
6. How long does a Section 232 investigation take and who participates?
By law, the Secretary of Commerce has 270 days to present the Department’s findings and recommendations to the President. Section 232 mandates that the Secretary provide notice to the Secretary of Defense upon initiation of the investigation. The Secretary also consults with the Secretary of Defense regarding methodological and policy questions raised in the investigation and can seek information and advice from other government agencies.
7. What actions does the statute allow the President to take?
Within 90 days after receiving the report from the Secretary, if the Secretary finds that an import threatens to impair U.S. national security, the President shall determine whether he concurs with the Department's finding and, if so, the nature and duration of the action that must be taken to “adjust” the imports of the article and its derivatives so that such imports will not threaten to impair the national security. Under Section 232, the President has broad power to impose trade remedies such as tariffs and quotas.
8. Where can I go to find more information about Section 232 investigations?
Since 1980, Commerce has conducted fourteen Section 232 investigations. Prior to 1980, the Department of the Treasury conducted Section 232 investigations.
For more information about Section 232 investigations, please visit: www.bis.doc.gov/232