President Trump has issued a proclamation providing for additional 25 percent tariffs on imports of certain steel products and 10 percent tariffs on imports of certain aluminum products. The Administration's position is that Section 232 of the Trade Expansion Act of 1962 ("Section 232") authorizes the President to take this action to preserve U.S. national security.  

Tariffs are to cover steel products that fall under Harmonized Tariff Schedule of the United States ("HTSUS") headings 7206.10 through 7216.50; 7216.99 through 7301.10; 7302.10; 7302.40 through 7302.90; and 7304.10 through 7306.90. Those headings include semi-finished steel; flat-rolled steel; bars, and rods; certain angles, shapes, and sections; sheet piling; rails; oil country tubular goods; other tubes and pipes; and sundry other products.

Tariffs are to cover aluminum products under HTSUS headings 7601; 7604; 7605 to 7609; 7616.99.51.60; and 7616.99.51.70. Those headings include unwrought aluminum; aluminum bars, rods, and profiles; aluminum wire; aluminum plate, sheet, strip, and foil (flat rolled products); aluminum tubes and pipes and tube and pipe fittings; and aluminum casting and forgings.

The tariffs are to take effect on March 23, 2018. They derive from Section 232 investigations that the Secretary of Commerce initiated in April 2017 and are based on recommendations that the Secretary sent to the White House on January 17, 2018. The tariffs are enormously controversial within the executive branch, in the Congress, and more broadly throughout the United States (to say nothing of international observers).

Presidents have rarely acted under Section 232. Since 1980, only two of fourteen Section 232 investigations resulted in import restraints. In 1982, President Reagan embargoed Libyan crude oil imports under Section 232. In 1986, a Section 232 investigation resulted in import restraints on certain machine tools that were negotiated with the Japanese and Taiwanese governments. 

At least initially, the Section 232 steel and aluminum tariffs will not apply to imports from Canada or Mexico. To attempt to preserve their exemptions, those countries will be allowed to engage with the Administration on ways to enhance their security relationship with the United States and develop what is, in the Administration's view, a better NAFTA (NAFTA renegotiations are ongoing). No country other than Canada or Mexico is excluded from the tariffs.

The presidential proclamation also provides that any country with which the United States has a security relationship (for example, NATO nations, Australia, Japan) may explore with the U.S. government alternative ways to address national security implications of steel and aluminum imports. This could provide a basis for the President to remove or modify the tariffs with regard to that country.

While the tariffs do not single out China, the Administration contends that Chinese steel and aluminum overproduction is the main, underlying trade problem. Administration sources have observed that the United States is unable to address Chinese steel or aluminum overcapacity through additional U.S. import restraints because China does not export substantial quantities of steel or aluminum to the United States (in large part due to antidumping and countervailing duties imposed on such Chinese products).

The proclamation authorizes exclusions from the tariffs for products determined by the U.S. government not to be produced in the United States in a sufficient quantity and quality such that the imports do not raise national security concerns.