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Legislative Efforts to Limit Section 232 Presidential Authority Continue

Senate Finance Committee Chairman Chuck Grassley (Republican-Iowa) said on 6 March that his staff is working with Republican and Democratic committee members to develop a bill aimed at limiting presidential authority to establish tariffs under Section 232 of the Trade Expansion Act of 1962. He noted that any such bill would need to pass the House and Senate with a two-thirds majority to override a potential veto from President Trump.

Trump asked Congress in his State of the Union address to pass the Reciprocal Trade Act, which would provide the administration with additional uni-lateral authority to impose tariffs on certain imports. However, Grassley said prior to that address that “we aren’t going to give him any greater authority” because “we’ve already delegated too much.”

As previously reported, two bills have been introduced by members of the Senate Finance Committee to limit the Section 232 tariff authority that was used to impose tariffs on steel and aluminium imports. Sen. Pat Toomey (Republican-Pennsylvania) introduced the Bicameral Congressional Trade Authority Act on 31 January while Sen. Rob Portman (Republican-Ohio) introduced the Trade Security Act on 6 February. Both bills mandate congressional involvement in establishing tariffs under Section 232 and have companion legislation in the House of Representatives with Democratic co-sponsors.

Toomey’s bill would allow for retroactive cancellation of tariff actions and require specific approval by both chambers of Congress for any Section 232 tariff action, while Portman’s bill would provide for disapproval of any new Section 232 tariff action if a joint resolution passes both chambers of Congress. Rep. Ron King (Democrat-Wisconsin), who is sponsoring both House companion bills, has said that while he supports both pieces of legislation it might be more challenging to pass the Toomey bill because the retroactive provision would require the repayment of duties already collected.

Congress has also expressed concern about the process for granting exclusions from the current Section 232 tariffs on steel and aluminium. The Consolidated Appropriations Act that reopened the federal government on 15 February included dedicated funding to assist the U.S. Department of Commerce in handling the overwhelming number of exclusion petitions and also directed the DOC to provide quarterly reports to Congress on the implementation of the exclusion process.

Meanwhile, a DOC report that could lead to the imposition of Section 232 tariffs on the huge market for automobiles and auto parts was forwarded to the White House on 17 February for review and a decision within 90 days. Grassley has repeatedly stated that he has not yet seen this report. Two additional Section 232 investigations are on-going: a probe on uranium imports initiated on 18 July 2018 and an investigation on titanium sponge imports initiated on 4 March 2019.

While Sen. Grassley admitted that he had anticipated hesitation from some Democrats in considering Section 232 legislation “because they like to have tools that counteract unfair trade practices, maybe more than Republicans,” he has not found that to be the case among the members of his committee at this time. Also worth mentioning is the fact that industry groups including the U.S. Chamber of Commerce, the Koch Brothers’ Alliance for Promise and the Coalition of American Metal Manufacturers and Users have expressed support for legislation to limit the president’s use of Section 232.

Content provided by Picture: HKTDC Research
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