Business Roundtable: Congress Must Assert Its Constitutional Authority to Address Presidential Misuse of Section 232

February 16, 2018

In Senate Testimony, BRT Supports Corker Bill, Other Legislative Solutions to Advance the Goal of Preventing Inappropriate Restriction of Trade

Washington – In testimony before the Senate Committee on Foreign Relations today, Business Roundtable President & CEO Joshua Bolten called on Congress to assert its constitutional authority when a president misuses Section 232 of the Trade Expansion Act of 1962 to restrict trade. On behalf of Business Roundtable, an association of chief executive officers of leading U.S. companies who collectively employ more than 16 million people, Bolten expressed support for Senate Foreign Relations Committee Chairman Corker’s bipartisan bill to require approval of tariffs designated under Section 232 as well as other legislative approaches that would advance the goal of preventing the misuse of 232.

“As current circumstances make clear, 232 authority is susceptible to misuse. Business Roundtable today is calling on Congress to assert its constitutional authority when a president misuses Section 232 to restrict trade." 

In his testimony, Bolten outlined four reasons Business Roundtable strongly opposes the Administration’s imposition of Section 232 on steel and aluminum imports:

#1 Increased Cost to Consumers: 

“The Administration’s tariffs are a tax hike on American businesses and ultimately, consumers. In the case of the 232 steel and aluminum tariffs, it is a tax increase on $23 billion of imported steel and $18 billion of imported aluminum – both of which are key manufacturing inputs for industrial products and a variety of everyday items consumed by the American people. As the cost of production rises from these tariffs, so too will the cost of finished goods, making products less affordable for families across the nation and reducing demand for those products.” 

#2 Loss of Competitiveness:

“Higher production costs resulting from the Administration’s Section 232 tariffs are also making U.S. companies and products less competitive here at home and our exports less competitive in foreign markets. An increase in the cost of finished goods as a result of these tariffs makes U.S. products more expensive – and less attractive – versus their foreign rivals. Inevitably, this means lower revenue, lost profits and fewer jobs.” 

#3 Retaliation Against America’s Exporters:

“These tariffs are resulting in a cascade of retaliatory tariffs from some of our nation’s closest trading partners.

“Because of the Administration’s implemented Section 232 tariffs on steel and aluminum, a number of countries have announced significant retaliatory tariffs. So far, retaliation measures have been announced on approximately $40 billion in U.S. exports…

“According to a recent economic analysis by Trade Partnership Worldwide, the Administration’s steel and aluminum tariffs, and the resulting trade retaliation from our allies, will result in a net loss of over 400,000 American jobs. The study found for every steel or aluminum job created in the United States because of these tariffs, 16 American jobs will be lost in other sectors of the economy.”  

#4 Misuse of National Security Designation:

“The Administration’s improper use of the 232 statute – twisting the definition of ‘national security’ beyond reason – only invites other countries to do the same. Countries looking for a way to bypass long-established international trade rules to gain an unfair advantage over American businesses and workers now have a perfect opening to do so.”

Bolten also noted that the Administration’s use of 232 alienates the U.S. allies needed the most in addressing the problem: China’s many policies and practices that distort international commerce. These include unfair restrictions on access to and investment in Chinese markets, intellectual property theft, forced technology transfers, subsidies on domestic production and restrictions on digital trade. Business Roundtable believes the Administration can best address these problems by (1) detailing to China how their current practices must change; (2) establishing deadlines for China to adopt concrete reforms; and (3) describing the actions the United States will take – hopefully in coordination with U.S. allies – if China fails to address U.S. concerns.

“To encourage U.S. allies to join the Administration in convincing China to reform its trade practices, the Administration should permanently exempt U.S. allies from the Section 232 tariffs. This would create a constructive environment for the Administration to coordinate with our allies on our real, mutual challenge. The Administration and China should suspend their reciprocal imposition of tariffs in order to give negotiations for systemic economic reforms a chance to succeed.”

Click HERE to read the full testimony