President Trump Delays Implementation of Section 232 Tariffs on Imports of Automobiles and Automobile Parts

President Donald Trump today announced that his administration would delay for six months any action on the determination of the Department of Commerce (Commerce) in the Section 232 national security investigation into imports of automobiles and automobile parts.

This investigation under Section 232 of the Trade Expansion Act of 1962 was self-initiated by Commerce in June 2018 (see Trump and Trade Update of June 1, 2018) and, while a final report and determination was presented to the president on February 17, 2019, the report has not been made public.

Nevertheless, Trump issued a proclamation directing the U.S. Trade Representative to negotiate agreements with other countries to address “the national security threat, which is causing harm to the American automobile industry.” The proclamation states that the investigation concluded that imports of automobiles and certain automobile parts are “weakening our internal economy” and threaten to impair the national security. The proclamation notes that the Section 232 determination found that “automotive research and development (R&D) is critical to national security” and “increases in imports of automobiles and automobile parts, combined with other circumstances, have over the past three decades given foreign-owned producers a competitive advantage over American-owned producers.” Importantly, the president concluded that “United States defense and military superiority depend on the competitiveness of our automobile industry and the research and development that industry generates.” The proclamation states that if agreements are not concluded within 180 days, the president will determine whether and what further action must be taken, particularly as to protected foreign markets, such as those in the European Union and Japan.

Compliments of Thompson Hine, a member of the EACCNY