Section 232 (Auto and Automotive Parts)

On Monday, July 16, 2018, the Commerce Department will post a notice in the Federal Register cancelling one of the days of the two-day public hearing associated with the investigation the Department is conducting to determine whether imports of automobiles, including cars, SUVs, vans and light trucks, and automotive parts threaten to impair the national security and to recommend remedies if such a threat is found to exist.

The hearing was originally scheduled for July 19 and 20. The Department received 45 requests to testify, which can all be accommodated on a single day. Therefore, the second day of the hearing originally scheduled for July 20 is cancelled.

The hearing will be held on July 19 only and will begin at 8:30 am and will end at 5:30 pm. The location of the hearing remains unchanged.

 

 

 

 

On June 21, 2018, the U.S. Department of Commerce published in the Federal Register an extended commenting schedule in the Section 232 investigation on U.S. imports of automobiles, including cars, SUVs, vans and light trucks, and automotive parts.

Commerce is now extending that comment period by a week from the initial deadline.

Interested parties are invited to submit comments, data, analyses, or other information pertinent to the investigation by June 29, 2018. Rebuttals to any  comments are now due by July 13, 2018.

June 29, 2018 is also the deadline for requesting to appear at the public hearing and for submissions of a summary of expected testimony. The public hearing will continue to be held on July 19 and 20, 2018 in Washington, DC.

Commerce initiated the Section 232 national security investigation on U.S. imports of automobiles and auto parts on May 23, 2018. Similar to the earlier completed 232 investigations on steel and aluminum, 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. For details, please click here, and here.

 

On May 23, 2018, the Secretary of Commerce initiated an investigation to determine the effects on the national security of imports of automobiles, including cars, SUVs, vans and light trucks, and automotive parts. This investigation has been initiated under section 232 of the Trade Expansion Act of 1962, as amended.

On May 30, 2018, the Department of Commerce (Commerce) published in the Federal Register details on the public hearing, scheduled for July 19-20, as well as the schedule for commenting and submitting rebuttal comments.

Interested parties are invited to submit written comments, data, analyses, or other information pertinent to the investigation to the Department of Commerce by June 22, 2018. Rebuttals to those comments are due by July 6, 2018.

June 22 is also the deadline for requesting to appear at the public hearing and for submissions of a summary of expected testimony.

Commerce will hold a public hearing on the investigation on July 19 and 20, 2018 in Washington, DC. The notice identifies the issues on which the Department is interested in obtaining the public’s views and discusses the procedures for public participation in the hearing.

Per the notice, Commerce is particularly interested in the following criteria as they affect national security:

 

 

  • The quantity and nature of imports of automobiles, including cars, SUVs, vans and light trucks, and automotive parts and other circumstances related to the importation of automobiles and automotive parts;
  • Domestic production needed for projected national defense requirements;
  • Domestic production and productive capacity needed for automobiles and automotive parts to meet projected national defense requirements;
  • The existing and anticipated availability of human resources, products, raw materials, production equipment, and facilities to produce automobiles and automotive parts;
  • The growth requirements of the automobiles and automotive parts industry to meet national defense requirements and/or requirements to assure such growth, particularly with respect to investment and research and development;
  • The impact of foreign competition on the economic welfare of the U.S. automobiles and automotive parts industry;
  • The displacement of any domestic automobiles and automotive parts causing substantial unemployment, decrease in the revenues of government, loss of investment or specialized skills and productive capacity, or other serious effects;
  • Relevant factors that are causing or will cause a weakening of our national economy;
  • The extent to which innovation in new automotive technologies is necessary to meet projected national defense requirements;
  • Whether and how the analysis of the above factors changes when U.S. production by majority U.S.-owned firms is considered separately from U.S. production by majority foreign-owned firms; and
  • Any other relevant factors.

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