According to a May 23 U.S. Department of Commerce (Commerce) press release, “U.S. Secretary of Commerce Wilbur Ross initiated an investigation under Section 232 of the Trade Expansion Act of 1962, as amended. The investigation will determine whether imports of automobiles, including SUVs, vans and light trucks, and automotive parts into the United States threaten to impair the national security as defined in Section 232.”

The results of the Section 232 national security investigations into imports of aluminum and steel should give the auto and automotive parts industry pause. Steel was assigned a 25 percent tariff and aluminum 10 percent. There are opportunities for country exemptions and product exclusions. Country exemptions are handled by the Trump administration, but product exclusions must be submitted by U.S. companies to Commerce. To date, more than 10,000 comments have been filed with Commerce related to steel product exclusions, as well as 1,500 related to aluminum product exclusions.

Commerce is also considering a Section 232 investigation into uranium, though no decision on that has been made.

Commerce now has 270 days to conduct an investigation and prepare a report on its findings for submission to the President.

The Secretary of Commerce must consult with the Secretary of Defense during the investigation and may request of his counterpart an assessment of the defense requirements for autos and automotive parts. The communications Commerce receives from other U.S. Government agencies, such as the Department of Defense, is not available for public inspection. In the course of its investigation, Commerce may also solicit additional information from other sources through the use of questionnaires or other means.

In the event action against auto and automotive imports is found to be necessary based on Commerce’s report, the President has authority to take action to “adjust imports” of autos and/or automotive parts. The potential remedies available to the President in this context include changing the rate and form of import duties on autos and/or automotive parts without apparent limitation, as well as limiting or restricting autos and/or automotive parts imports, including through the negotiation of an agreement to that effect.

Commerce stated in the press release that a notice will be published shortly in the Federal Register announcing a hearing date and inviting comment from industry and the public to assist in the investigation. This is the only time interested parties will be afforded an opportunity to present information and advice relevant and material to the investigation (e.g., written comments, opinions, data, information or advice). The public hearing will also allow interested parties the opportunity to submit oral or written information.

Using the Section 232 investigation into imports of steel as a guide, below is an approximate timeline for the auto and automotive parts investigation.

Event Allotted Time Approximate Date
Initiation of DOC investigation May 23, 2018
Federal Register Notice announcing public hearing and soliciting comments approx. 7 days May 30, 2018
Request to participate in public hearing with summary of oral presentation approx. 21 days June 20, 2018
Participation in public hearing approx. 35-42 days July 11, 2018
Submission of post-hearing comments approx. 7 days  

July 18, 2018

 

Overall conduct of DOC investigation 270 days February 17, 2019
Presidential determination whether to act 90 days May 18, 2019
Delay within which action must be taken 15 days from President’s determination June 2, 2019
President must inform Congress 30 days from President’s determination July 2, 2019