SEMA eNews Vol. 22, No. 5, January 31, 2019

Federal Bill Introduced to Require Congressional Approval Before Tariffs Are Imposed

By SEMA Washington, D.C., Staff

The Bicameral Congressional Trade Authority Act of 2019 (the BCTAA) has been introduced in the U.S. House of Representatives and Senate to provide congress the ability to approve or disapprove of imposing tariffs based on national security concerns. SEMA supports the legislation, which provides necessary checks and balances to ensure that proper weighing of the overall national interest before tariffs or quotas go into effect.  

Under current law (Section 232 of the Trade Expansion Act of 1962), the U.S. Department of Commerce (DOC) conducts investigations with assistance from the U.S. Department of Defense. This Cold War-era trade statute delegated authority from Congress to the executive branch to put tariffs or quotas on imports that “threaten to impair” U.S. national security. If the DOC concludes that imports of certain goods threaten national security, the president may proclaim trade actions (tariffs, quotas, etc.) to adjust those imports. Historically, Section 232 actions have been limited in scope, targeting a few product lines. However, the current administration has used Section 232 more broadly—imposing sweeping 25% tariffs on foreign steel, 10% tariffs on imported aluminum, and threatening tariffs on auto imports.

Below is a summary the BCTAA:

  • Any potential tariffs that the president seeks to introduce pursuant to a Section 232 investigation would be submitted to Congress, which would then have 60 days to pass an approval resolution supporting the proposed action.
  • The bill clarifies the term “national security” in a way that limits Section 232 investigations to goods with applications in military equipment, energy resources and critical infrastructure needs. Lead investigative authority would be transferred to the Defense Department, with the DOC retaining a role in fashioning the appropriate remedy in the event of a positive investigative finding.
  • The bill puts the U.S. International Trade Commission (USITC) rather than the DOC in charge of the exclusion process for 232 actions. The USITC has extensive expertise in managing complex administrative procedures. Further, exclusions would be granted on a product-wide and not company-specific basis.
  • The bill would allow congress to reconsider tariffs and quotas which have been imposed under Section 232 within the last four years. Congress would be allowed to consider these actions and, if Congress determined not to pass an approval resolution within 75 days after enactment of the BCTAA, those tariffs and quotas would be repealed.

For details, contact Eric Snyder at erics@sema.org.

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