On October 25, 2018, the President signed the Hizballah International Financing Prevention Amendments Act of 2018 (“HIFPAA”). HIFPAA amends and strengthens the Hizballah International Financing Prevention Act of 2015, which aimed to sanction financial institutions that facilitate transactions for the group.

The new bill broadens the scope of the original bill by authorizing sanctions against Hizballah’s fundraising and recruitment efforts. It targets foreign persons who provide support to Hizballah institutions, including the organization’s media outlets. It also empowers the President to sanction agencies and instrumentalities of foreign states that provide financial support, arms, and related material to Hizballah. The bill also imposes sanctions directly on Hizballah for its involvement in transnational organized crime, including narcotics trafficking.

Finally, HIFPAA prescribes new reporting requirements, or modifies existing ones, for foreign persons that knowingly assist or provide significant financial, material, or technological support to foreign persons assisting Hizballah.

On July 21, 2017, President Trump signed Executive Order 13806, “Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States.” In the order, President Trump directed the Secretary of Defense to conduct a “whole-government” assessment of the U.S. manufacturing and defense industrial base and assess the risks facing the base, identify the possible impacts of those risks, and propose recommendations to address them.

In September 2018, the Secretary issued his report. The report was prepared by an inter-agency task force, consisting of sixteen working groups and over 300 subject matter experts from across the Federal government. In the report, the task force found that the U.S. industrial base faces a significant set of challenges, including those posed by the uncertainty of government spending, the decline of critical markets and suppliers, the unexpected consequences of U.S. government acquisition behavior, aggressive industrial policies of competitor nations, and the loss of vital skills in the domestic workforce.

To address these challenges, the task force made a variety of recommendations, including a recommendation that the United States work to expand direct U.S. investment in the lower tier of the industrial manufacturing base and reduce the country’s dependence on foreign suppliers and investors.

As we have previously reported, several of the United States’ top trading partners, including Canada, China, the European Union, Mexico, Norway, Russia, and Turkey, have filed complaints with the WTO challenging the Administration’s tariffs on steel and aluminum. Following unsuccessful consultations between the United States and these parties, the seven member states have all requested that the WTO establish dispute settlement panels to examine whether the mentioned tariffs, as well as Section 232 of the Trade Expansion Act of 1962 itself, are consistent with WTO rules.

Last week, the United States blocked the panel requests at the WTO’s Dispute Settlement Body, thus deferring the establishment of the dispute settlement panels for several weeks. If the seven members file a second set of requests for the establishment of dispute settlement panels, as they are expected to do, the United States will not be able to block the requests. Accordingly, when and if these members re-file their requests, the Dispute Settlement Body will establish the panels at its next meeting, which is scheduled for November 21, 2018.

In the challenges, the members contend that the steel and aluminum tariffs are essentially safeguard actions and were not imposed in compliance with the WTO’s Safeguards Agreement. In response, the United States has taken the position that the tariffs were imposed to protect its national security interests and are therefore exempt from challenge at the WTO. The United States asserts that, if the WTO entertains the appeals, it will undermine the legitimacy of the WTO dispute settlement system and “the viability of the WTO as a whole.”

It is likely that the dispute resolution process for these challenges will last several years. A final decision in the appeals could affect not only the Administration’s steel and aluminum tariffs, but also the long-term viability of section 232 itself, should the dispute settlement panel or the Appellate Body rule that section 232 is inconsistent with the WTO Agreements.