Under Section 232 in the Trade Expansion Act of 1962, the Commerce Department may investigate the effect of imports on national security. Commerce announced its investigation of steel imports on April 20. It will consider overcapacity, dumping, illegal subsidies, and other factors, to determine whether steel imports threaten American economic security and military preparedness. It is the first such investigation since 2001. Findings could lead to a conclusion that protective duties on imported steel should be applied for national security reasons.
“Pursuing a strategy of import protection under the guise of national security would set a dangerous precedent,” said Alan Tracy, president of USW. “If the United States undermines WTO national security exemptions, it would be handing a gift-wrapped roadmap of protectionism to food self-sufficiency advocates all over the world.”
The World Trade Organization (WTO) allows countries to impose trade restrictions for very few reasons, including national security. According to the USW, this exception is rarely used outside of weapons, nuclear materials and the like because most countries understand that doing so would open a Pandora’s Box of competing national security claims. If the United States went first with a commonly traded product like steel, many countries may be eager to include food security in the exception.
“I’m all for challenging unfair subsidies, but farmers like me know you need to use the right tool to fix a problem,” said Jason Scott, chairman of USW. “Citing national security to block imports like this would be like lighting a fire to kill a weed. It might do the job but you could destroy the whole field.”
The Department of Commerce has only authorized duties twice after Section 232 investigations, and not once since the WTO was created in 1995. The WTO agreements include an exemption under GATT Article XXI for trade restrictions related to “essential security interests,” which can be defined broadly by the WTO member country.