Reviving Section 232: Trump’s strategic shift in trade tariffs

Section 232 of the Trade Expansion Act authorizes the government to impose trade restrictions in the name of national security.

The Trump administration is advancing with a new wave of tariffs that, according to trade experts, could have as broad an impact as the previous country-specific levies but with a stronger legal foundation. This new strategy is based on Section 232 of the Trade Expansion Act, which authorizes the government to impose trade restrictions in the name of national security.

The Department of Commerce is expected to announce in the coming weeks the results of investigations into key sectors such as semiconductors, pharmaceuticals, and critical minerals. According to Transport Topics, these investigations could result in new tariffs on a wide range of foreign products in those industries.

Section 232 tariffs: the Trump administration’s recent strategy

This strategy is not new. In 2018, Trump used the same authority to impose 50% tariffs on steel and aluminum. The current shift involves expanding the scope to consumer goods containing these metals, such as appliances, fishing reels, brooms, and other household products — measures that currently affect around $200 billion in products, according to Michigan State University.

The Department of Commerce has already officially expanded steel and aluminum tariffs to include dishwashers, dryers, and washing machines, all deemed vital to national security. A similar approach is expected in the remaining seven ongoing investigations, which could even impact smartphones made by companies like Apple if they are not assembled in the U.S.

Additionally, American companies can request to have their domestic products included on the Section 232 tariff list. This year, items such as gym equipment, hangers, and door thresholds have been added.

Uncertainty in Section 232 trade negotiations

These measures, however, have created uncertainty in trade negotiations with global allies and partners. Countries are hesitant to sign agreements while investigations are ongoing, fearing they might be tied to sector-specific tariffs not yet defined. Japanese Prime Minister Shigeru Ishiba emphasized the need to proceed cautiously under these circumstances.

Leland Miller, of the U.S.-China Economic and Security Review Commission, warned of the “built-in uncertainty” surrounding these investigations, as it remains unclear whether the new tariffs will be added to existing country-based levies or replace them.

Jason Miller, an economist at Michigan State University, highlighted that the current scope of Section 232 is much broader than in 2018, now affecting consumer products such as metal furniture and cookware. He also warned of a possible inflationary effect, especially in sectors like steel cans, whose price index has risen 8.7% so far this year.

Although it is still too early to measure the full economic impact, Miller cautions that effects such as inflation, a reduction in product variety, and a drop in demand may become evident.