While there are plenty of trade issues that await U.S. Trade Representative Katherine Tai as she officially assumes her post this week, there’s one thing that Congress can handle completely on its own: reforming one of the worst trade laws on the books.
Section 232 of the Trade Expansion Act of 1962 gives the president broad authority to take actions, such as imposing tariffs, against imports deemed to be a threat to “national security.” In a new Cato Policy Analysis, we explain how President Trump repeatedly took advantage of this poorly‐drafted law, with serious consequences for American consumers and businesses. But Congress has the exclusive and plenary authority to regulate trade with foreign nations, and the abuse of Section 232 by Trump has prompted some members of Congress to call for reform.
One such effort is the Trade Security Act, which co‐sponsors Senators Rob Portman (R-OH), Dianne Feinstein (D-CA), Joni Ernst (R-IA), Kyrsten Sinema (D-AZ), Deb Fischer (R-NE), Roger Wicker (R-MS), and Todd Young (R-IN) reintroduced on March 15, 2021. This action is a positive step towards restarting the congressional conversation on Section 232’s myriad problems, but in our view the bill doesn’t go nearly far enough.
Indeed, the Trade Security Act leaves Section 232’s biggest substantive and procedural problems entirely unaddressed:
First, one of the major problems with Section 232 is that it does not provide a clear definition for what constitutes “national security” so almost anything can be labelled a threat. This bill attempts to address this flaw by moving from the Secretary of Commerce to the Secretary of Defense responsibility for “prepar[ing] an assessment of the defense requirements and national security impact of any article that is the subject of an investigation” and adding a focus on “military readiness and critical infrastructure.” However, the act leaves all of these terms undefined and maintains other language, such as the economic factors that may be considered under Section 232(d), thus continuing to allow a creative Executive Branch to define a “national security” threat in any way it sees fit, regardless of the merits or actual nexus to national defense and military readiness. Perhaps the Defense Department would be less likely to engage in such behavior, but the only way to ensure that outcome is through real, statutory guardrails, not blind faith.
Second, the bill calls for consultations “with appropriate officers of the United States” including “members of the Committee on Finance of the Senate and members of the Committee on Ways and Means of the House of Representatives,” as well as public hearings. We certainly support any efforts to enhance transparency in the way the law is implemented, but there is no guarantee that these proposed consultations would amount to much – as the Trump administration’s pro forma (but statutorily‐required) “consultations” with Congress on the NAFTA renegotiation taught us. (Spoiler: there was not much actual consultation until the deal was complete.)
Third, the bill addresses none of the procedural loopholes that the Trump administration abused to impose tariffs, maintain tariff threats indefinitely, and shield investigative reports from Congress and the public. Indeed, the bill itself fails to provide a clear deadline for publishing a new report that the Secretary of Commerce would provide to the president. Without such a deadline, the president can delay publication indefinitely, just as President Trump has done with several reports completed during his term. Firm deadlines for publication of non‐confidential versions of these reports must be part of any Section 232 reform, and other procedural loopholes should also be closed.
Fourth, the bill does little to restore the constitutional role of Congress in U.S. trade policy under Section 232. It expands the law to allow Congress to pass a joint “disapproval resolution” by a simple majority vote – a process currently only permitted for petroleum products. However, this provision is almost meaningless because the president can still veto any action Congress takes in this regard. As we explain in our paper, if Congress insists on keeping Section 232 but creating a real congressional check on its use, legislation must require Congress to pass an affirmative resolution for approval prior to any Section 232 measure’s entry into force (except, perhaps, for a short grace period in times of national emergency). Only this approach would effectively prevent the president from taking action unless Congress approves. It also would not only rein in the abuse of presidential authority but also hold Congress to account for trade policy and ensure that the President engaged in real consultations prior to completing a Section 232 action. Other bills such as the Bicameral Congressional Trade Authority Act of 2019 co‐sponsored by Sens. Pat Toomey (R-PA) and Mark Warner (D-VA), include such a provision.
Finally, this bill only applies to actions taken after July 1, 2018, which means it expressly excludes from new congressional oversight the only tariffs that the Trump administration actually implemented under Section 232 – those on steel and aluminum. It is unclear why Congress would want to exempt these measures from review, especially given their significant economic harms and that they are a poster‐child for the Trump administration’s abuses of the law.
Overall, it is good that the Trade Security Act gets Section 232 back on the Congressional radar, but the bill does little to correct the multitude of issues that would make reform actually meaningful, thus remedying a bad U.S. law and improving trade policy in the future. A robust dialogue is required, as well as a full accounting of the impacts of the Trump administration’s utilization of Section 232, which we cover in detail in our paper. Congress’ renewed appetite for reform of Section 232 is welcome, but it’s critical that we take the time to get these changes right.