New year, new pricing! Sign up today and save upto 20% on bookkeeping plans. Close Icon

Section 232 of the Trade Expansion Act

Section 232 of the Trade Expansion Act of 1962 empowers the President of the United States to adjust imports of products or commodities from other nations through tariffs or other means if the quantity or circumstances surrounding those imports harm national security.

President John F. Kennedy signed the Trade Expansion Act of 1962, calling it "the most important piece of legislation, I believe, affecting economies since the passage of the Marshall Plan."

Section 232 and Free Trade Agreements

14 Section 232 investigations have been carried out by the Department of Commerce since 1980.

The Department determined that the imports of steel and aluminum in 2018—during Donald Trump's presidency—"threaten to impair the national security," as specified by Section 232.

During his campaign, Donald Trump made a commitment to renegotiate international trade agreements in the United States' favor. During his presidency, he specifically targeted the Trans-Pacific Partnership (TPP) and the North American Free Trade Agreement (NAFTA).

How Section 232 of Trade Expansion Act Works

The Secretary of Commerce may voluntarily launch an investigation under Section 232 of the Trade Expansion Act of 1962, or an interested party may do so by submitting an application. Any investigation that is started must be submitted to the Secretary of Defence, who can also be contacted for information and counsel if any policy issues come up.

Within 270 days of beginning an inquiry, the Department of Commerce must report its findings to the President, with a focus on whether or not specific imports pose a threat to the nation's security. The Commerce Department's report is given to the President, who has 90 days to formally concur or disagree with it.

If they agree, they have the legal ability under Section 232 to alter the imports as required by imposing taxes or quotas. In practice, based on the Secretary's suggestions included in the reports, the President of the nation may decide not to take any action after the report is presented.

Key Takeaways

The Trade Expansion Act of 1962 was enacted to use trade agreements to further the general welfare, foreign policy, and security of the United States.Under certain conditions, the president of the United States is permitted by Section 232 of the Act to apply tariffs without consulting Congress.

President Trump is well known for using Section 232 to start a series of tit-for-tat tariffs with international exporters, sparking trade battles with many countries, particularly China.

Get Fincent

Let's get your money right

  • Bookkeeping
  • Tax Prep and Filing
  • Invoicing and Payments