Protectionism or National Security? The Use and Abuse of Section 232

20 Pages Posted: 19 Apr 2021

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Cato Institute

Cato Institute

Scott Lincicome

Cato Institute

Inu Manak

Council on Foreign Relations

Date Written: March 9, 2021

Abstract

President Biden took office at the height of modern American protectionism. The trade policy legacy he inherited from the Trump administration puts the United States at a crossroads. Will Biden go down the problematic path of executive overreach like his predecessor, or will he forge a new path? We may not need to wait long to find out. In his first trade action, President Biden reinstated tariffs on aluminum from the United Arab Emirates under Section 232 of the Trade Expansion Act of 1962, which authorizes the president to impose tariffs when a certain product is “being imported into the United States in such quantities or under such circumstances as to threaten to impair national security.” Though infrequently used in the past, Section 232 was a favored trade tool of the Trump administration, which was responsible for nearly a quarter of all Section 232 investigations initiated since 1962. While Congress has constitutional authority over trade policy, Section 232 gives the president broad discretion to enact protectionist measures in the name of national security.

Why is this law a problem? First, the statute’s lack of an objective definition of “national security” permits essentially anything to be considered a threat, regardless of the merits. Second, the law’s lack of detailed procedural requirements encouraged the Trump administration to cut corners in applying the law, thus breeding cronyism and confusion. Third, President Trump took advantage of the law’s ambiguity to shield key Section 232 findings from Congress and the public, undermining both transparency and accountability.

The Trump administration’s abuse of the rarely used Section 232 has allowed the statute to become an excuse for blatant commercial protectionism, harming American companies and consumers and our security interests. It’s unclear whether the Biden administration will continue this troubling trend or seek reform. The best course of action would be the latter: Biden should avoid using Section 232 and support congressional efforts to rein in presidential power, thus ensuring an end to the calamitous episodes that were common during the Trump era.

Keywords: trade, protectionism, Section 232, tariffs, trade policy, Trade Expansion Act of 1962, steel tariffs

JEL Classification: F10, F12, F13, F14, F15, F16, H30, H39

Suggested Citation

Institute, Cato and Lincicome, Scott and Manak, Inu, Protectionism or National Security? The Use and Abuse of Section 232 (March 9, 2021). Cato Institute, Policy Analysis No. 912, Available at SSRN: https://ssrn.com/abstract=3827377

Cato Institute (Contact Author)

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Scott Lincicome

Cato Institute ( email )

1000 Massachusetts Avenue, N.W.
Washington, DC 20001-5403
United States

Inu Manak

Council on Foreign Relations ( email )

1777 F Street, NW
Washington, DC 20006
United States

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