Trade Expansion Act of 1962

The Trade Expansion Act of 1962 provided the President of the United States of America with new authority to cut (or impose) international trade tariffs. The ability to cut tariffs was only applicable for five years, while most of the rest of the legislation became a permanent feature of United States international trade policy. The Act would come into sharp international focus when President Trump relied on Section 232 of the Trade Expansion Act of 1962 to impose tariffs on steel and aluminum.

A Section 232 tariff refers to any tariff imposed pursuant to Section 232 of the Trade Expansion Act of 1962. The section permits the President of the United States, upon a recommendation from the Secretary of Commerce, to impose a tariff on any goods being imported in quantities or circumstances that threaten or impair national security.

Both Canada and Mexico are exempt from the current round of Section 232 tariffs on steel and aluminum. These nations are both members of the newly negotiated USMCA (United States, Mexico, and Canada Agreement), a free trade agreement formerly known as NAFTA (North American Free Trade Agreement).

Sections 301 through 310 of the Trade Act of 1974 are commonly referred to as “Section 301.” These sections permit an American president to impose or increase tariffs where a foreign country, in the opinion of the United States Trade Representative, engages in acts, policies, or practices that violate a trade agreement or burden or restrict US commerce.

Section 301 works by the United States Trade Representative beginning a “301 investigation.” The USTR has 12 to 18 months to seek a negotiated resolution with the nation allegedly engaging in practices that contravene Section 301. At the end of that period, retaliatory measures, like the imposition of tariffs, may be undertaken. In cases where a trade agreement is involved, the US must use the trade dispute mechanism found in the agreement.

A Section 301 action is any action under Sections 301 to 310 of the Trade Act of 1974 by the United States Trade Representative to address or retaliate against any act, policy, or practice of a foreign country that violates a trade agreement or burdens or restricts US commerce.

A Section 301 probe is another phrase for a Section 301 investigation. A Section 301 investigation is the first phase required for the eventual imposition of a Section 301 tariff. It occurs under the authority of sections 301 to 310 of the Trade Act of 1974 and is designed to uncover acts, practices, or policies that violate trade agreements or burden or restrict US commerce.