The results of the Department of Commerce’s section 232 investigation into the effect of automobile and auto parts imports on U.S. national security were submitted to President Trump Feb. 17. However, neither those result nor the DOC’s recommendations have yet been made public. The president now has up to 90 days to decide whether to take action in this case.
(Click here to register for Sandler, Travis & Rosenberg's Feb. 20 webinar "The Intersection of AD/CVD, Section 232 and Section 301 for the Automotive Industry: What You Need To Know)
In May 2018 the DOC self-initiated an investigation under section 232 of the Trade Expansion Act of 1962 to determine whether foreign-made automobiles (including SUVs, vans, and light trucks) and auto parts are being imported in such quantities or under such circumstances as to threaten or impair U.S. national security. If the DOC’s determination is affirmative, and the president concurs, he has the authority to adjust imports, including through the use of tariffs and quotas. Any import adjustments, or any other non-trade-related actions the president may elect to take, would be imposed within 15 days of the president’s determination to act.
Trump has threatened tariffs of up to 25 percent but has been opposed by automakers and others. The European Union appears safe from any potential measures after Trump committed last summer to leave the EU out as long as bilateral trade talks are making progress. However, the EU has reportedly prepared nearly $23 billion in retaliatory sanctions if restrictions are imposed. In addition, side letters to the U.S.-Mexico-Canada Agreement exempt 2.6 million vehicles from each of those partner countries from any potential Section 232 measures.
In January two senators re-introduced legislation that would delay the imposition of Section 232 tariffs on imported autos and auto parts until the International Trade Commission conducts a study of how such tariffs would affect the U.S. auto industry.
For more information on this section 232 investigation and how it may affect your business, please contact Kristen Smith at (202) 730-4965.