There are some serious issues with the Congressional Trade Authority Act, and AAM is urging members to oppose it.
Newly introduced legislation would deal a major blow to domestic producers of steel and aluminum, and their workers, who are struggling to keep up with global overcapacity. These materials are necessary for a range of national security and critical infrastructure applications.
The Congressional Trade Authority Act (H.R. 1903) takes aim at Section 232 of the Trade Expansion Act of 1962, which allows the president to impose tariffs or quotas when imports threaten domestic production of materials or products vital to our national security. Section 232 was notably used during the first Trump administration – and reaffirmed by the Biden administration – to allow domestic steel and aluminum producers to regain their footing in the face of surges of imports due to unfair trade and massive and growing global overcapacity.
But the bill’s backers say Section 232 has been “grossly abused,” and they propose rewriting the process for investigating and approving proposed actions. The bill would require Congress to formally pass legislation before a Section 232 national security action could take effect. And, by significantly narrowing its scope to goods to “military equipment, energy resources, and/or critical infrastructure,” the bill may well prevent any Section 232 actions from ever advancing.
Critically, the new process would also apply retroactively to any existing Section 232 actions, including the actions on steel and aluminum.
The Alliance for American Manufacturing is urging lawmakers to oppose H.R. 1903 in a letter we’ve sent up to Capitol Hill. Here are a few of the reasons why.
Requiring Congressional approval slows the process. This tool is needed to respond to import surges and other dangerous market dynamics that imperil domestic production important to our national security, and Congress is not known for being quick on its feet. While H.R. 1903 imposes a timeline in which lawmakers can consider granting approval for the authority’s use, that window of time will be used by foreign producers and importers to stockpile their inventories before tariffs can take effect. It would, in effect, make the problem that Section 232 is used to address worse. And while Congress waits months to cast a vote, the process will surely be bogged down by special interest lobbying and foreign government influence seeking to maintain access to the U.S. market.
Meanwhile, narrowing the definition of what rises to a national security concern overlooks the importance of functioning commercial markets for domestic producers of essential products. To meet security demands in those moments of acute crisis, they need a commercial market through periods of peace to sustain their production, make capital investments, fund industrial research, and maintain a skilled workforce.
Steel and aluminum are essential products. The companies and workers that produce them supply the building blocks for everything from ships and tanks to bridges, rail systems, and our energy infrastructure. And the first use of Section 232 in decades came when the first Trump administration used them to respond to the accumulation of overcapacity in these industries, created by state-directed production in countries like China, that caused bankruptcies and layoffs in the United States. The 232 action worked to stabilize these industries, and it was maintained by the Biden administration.
Global overcapacity in steel and aluminum hasn’t receded. But by clawing back the Section 232 tariffs anyway, H.R. 1903 would effectively reward the same entities who continue to warp the market.
There are other concerns still with this legislation, including its proposal for a reckless product exclusion process and plans to shift Section 232 investigations away from experts equipped to conduct them at the U.S. Department of Commerce. You can read them in more detail in our letter to Congress.
What’s more, measures like H.R. 1903 that undermine available trade and national security tools send the wrong message to voters who, in poll after poll, say they want Washington to aggressively enforce our trade laws. Rather than making it more difficult to address unfair trade and overcapacity plaguing critical industries, Congress should focus on issues like de minimis reform or passing the Leveling the Playing Field Act 2.0 (H.R. 1548) to strengthen anti-dumping and countervailing duty enforcement.
And that’s why AAM is urging lawmakers to oppose this bill.