GOOD SUMMARY: Trump moves on aluminum under Section 232; Steel investigation update. [archive]
Just one week after launching a national security investigation of steel imports [PDF; archive] under Section 232 of the Trade Expansion Act of 1962, President Trump has announced plans to institute a similar investigation regarding aluminum. . . .
President Trump’s memorandum on the Section 232 aluminum investigation largely mirrors his prior memorandum on the Section 232 steel investigation. Both memoranda note that “[c]ore industries such as steel, aluminum, vehicles, aircraft, shipbuilding, and semiconductors are critical elements of our manufacturing and defense industrial bases.” Both memoranda emphasize the need to defend these core industries “against unfair practices and other abuses.” Both memoranda assert that “global markets” are “distorted by large volumes of excess capacity” and observe that this excess capacity “discourages long-term investment in the industry.” Finally, both memoranda emphasize that other efforts at controlling overcapacity have been unsuccessful. . . .
The Commerce Department determines the effect of imports on national security based on the quantity of those imports, and other circumstances related to importation. The Commerce Department judges national security requirements based on a number of factors, including the domestic production needed for national defense requirements, the capacity of domestic industries to meet national defense requirements, and existing and anticipated availability of human resources, raw materials, and other supplies essential to national defense. . . .
According to a Commerce Department summary, [PDF] there have been 26 prior investigations under Section 232, with the first investigation occurring in 1963 and—prior to last week—the most recent investigation being initiated in 2001.
Related: Steel Imports Report: United States (December 2016), courtesy the International Trade Administration of the Department of Commerce.
Also related: Wikipedia entry on the 2002 United States steel tariff, [archive] in particular the “International response” section:
The tariffs ignited international controversy as well. Immediately after they were filed, the European Union announced that it would impose retaliatory tariffs on the United States, thus risking the start of a major trade war. To decide whether or not the steel tariffs were fair, a case was filed at the Dispute Settlement Body of the World Trade Organization (WTO). Japan, Korea, China, Taiwan, Switzerland, Brazil and others joined with similar cases.
On November 11, 2003, the WTO came out against the steel tariffs, saying that they had not been imposed during a period of import surge—steel imports had actually dropped a bit during 2001 and 2002—and that the tariffs therefore were a violation of America’s WTO tariff-rate commitments. The ruling authorized more than $2 billion in sanctions, the largest penalty ever imposed by the WTO against a member state, if the United States did not quickly remove the tariffs. After receiving the verdict, Bush declared that he would preserve the tariffs. In retaliation, the European Union threatened to counter with tariffs of its own on products ranging from Florida oranges to cars produced in Michigan, with each tariff calculated to likewise hurt the President in a key marginal state. The United States backed down and withdrew the tariffs on December 4.