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Legislation to Delay Section 232 Tariffs on Autos Introduced

Friday, January 18, 2019
Sandler, Travis & Rosenberg Trade Report

Sens. Doug Jones, D-Ala., and Lamar Alexander, R-Tenn., re-introduced legislation Jan. 15 to delay the imposition by the Trump administration of additional tariffs under section 232 of the Trade Expansion Act of 1962 on U.S. imports of automobiles (including SUVs, vans, and light trucks) and auto parts.

According to a press release from Sen. Jones’ office, the Automotive Jobs Act (S. 121) would require the International Trade Commission to conduct a comprehensive study of the well-being, health, and vitality of the U.S. auto industry before any additional tariffs could be applied. As part of this study, the ITC would be required to assess, among other things, the number of autos assembled in the U.S. that are exported each year and to which countries, the percentage of component parts of autos assembled in the U.S. that are imported, the number of component parts for autos that are not produced in the U.S. and would thus not be available to U.S. auto producers if prohibitively high duties were imposed on imports of those parts, and the effect an increase in auto manufacturing costs would have on jobs in the U.S.

While Sen. Jones recognized the “need to address bad actors like China who’ve taken advantage of us on trade,” he said that “should be done in a way that doesn’t hurt other major job-creating industries and increase costs for American consumers.” The Alabama lawmaker added that an ITC study on the state of the U.S. auto industry would “make it undeniably clear to the President that this industry is not a national security threat.”  

The Department of Commerce has until Feb. 17 to conclude its section 232 investigation of autos and auto parts and submit a report to the president, though it could do so earlier. If the report finds that excessive auto and auto parts imports are a threat to U.S. national security, and the president concurs, the president has the authority to adjust imports, including through the use of tariffs and quotas. Any such actions would be imposed within 15 days of the president’s determination to act.

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