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| Long title | An Act to promote the general welfare, foreign policy, and security of the United States through international trade agreements and through adjustment assistance to domestic industry, agriculture, and labor, and for other purposes |
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| Enacted by | the87th United States Congress |
| Citations | |
| Public law | 19 U.S.C. ch. 7 |
| Legislative history | |
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TheTrade Expansion Act of 1962 (Pub. L. 87–794, 76 Stat. 872, enactedOctober 11, 1962, codified at19 U.S.C. ch. 7) is an American trade law.[1]
The law was intended to maintain American economic influence in the wake of the creation of theEuropean Economic Community.
The Trade Expansion Act granted thepresident of the United States unprecedented authority to negotiate tariff reductions of up to 50%. It paved the way for theKennedy Round ofGeneral Agreement on Tariffs and Trade (GATT) negotiations, concluding on June 30, 1967, the last day before expiration of the Act.[2]
Section 232 of the act permits the president to impose tariffs based on a recommendation by theU.S. secretary of commerce if "an article is being imported into the United States in such quantities or under such circumstances as to threaten or impair the national security."[3] This section was used only in 1979 and 1982,[3] and had not been invoked since the creation of theWorld Trade Organization in 1995,[4] untilPresident Trump cited it on March 8, 2018, to imposetariffs on steel and aluminum.[citation needed]
In the early 1960's US politicians were worried about the growing influence of theEuropean Economic Community and the ever-present influence of the Soviet Union. PresidentJohn F. Kennedy determined that a loosening of trade restrictions would spark an increase in economic growth and keep the American economy competitive.[5] Therefore, they began to champion a new trade act that would give the President the authority to revamp US trade policy.Republicans and some industry leaders were initially skeptical, however, and believed that a loosening of trade policy would cause significant harm to American domestic industries and workers, especially amidst a persistent unemployment issue.[6]
The act's stated purpose is to stimulate the US economy through the lowering of trade barriers, with a focus on countering Communist economic influence. To accomplish this goal the act granted the President a 5-year authority to reduce or increasetariffs by a maximum of 50% the initial level. The President was also empowered to eliminate trade barriers on goods that the United States and EEC combined accounted for at least 80% of the market, with agricultural products being exempt to the 80% rule. A "Tariff Commission" would also be created that was tasked with advising the President on the economic effect of adjustments to tariff policy. The law also created theOffice of the United States Trade Representative. This office would serve as the primary negotiator with foreign countries concerning trade. The President and the Tariff Commission would also be required to submit annual reports to congress on their activities under the act. Many, however, were concerned about negative impacts to domestic industries as a result of these adjustments, to soften the blow a system was created that would allow industry leaders, firms, and workers to submit petitions to the Tariff Commission for relief. In the event the Tariff Commission found that damage was done as a result of the new trade policies it would require the President to offer assistance. This could take many forms; The President could invoke the "Escape Clause" which allowed the president to rapidly raise tariffs again. The President could also provide monetary aid to businesses in the form of loans or tax-breaks. Workers could be eligible to receive unemployment aid or even retraining. Another avenue would be the imposing of international quotas to protect industries.[7]
The act started its journey with a massive public relations campaign spearheaded by the Kennedy administration. The goal of the campaign was to frame the act as necessary in order to maintain national security. The campaign also sought to reach out to important interest groups, highlighting how they could benefit from the reforms in the proposed legislation.[8]
The act was officially introduced in the House on August 8, 1961, and would remain in committee for the remainder of the year and into 1962. It passed through theHouse Committee on Ways and Means, and theHouse Committee on Rules, with the Ways and Means committee making modifications to the bill. The most important was the addition of an "Escape Clause" section. Which, In the event of economic damages, the President would be required to lower tariffs to compensate.[9] Protectionists attempted to kill the bill on June 12, 1962, in committee by having it recommitted, but their attempt was unsuccessful.[10] The act then passed the House on June 29, by a significant margin with no amendments made on the floor.[11]
The SenateCommittee on Finance deliberated for several weeks sent the bill to the floor on September 14th. The Finance committee version was similar to the House version, but it differed in that it restored themost favored nation status ofYugoslavia and thePolish People's Republic. This was previously added by the House as a means to combat Communist economic influence and would become a point of debate between the two branches.[12] On the floor the legislation was subject to a lengthy amendment process before being passed by a wide margin on September 19.[13] Both the Senate and House agreed to a conference committee to resolve their differences. The committee agreed to strip out the provision restoring the most favored nation status for Yugoslavia and Poland and revert other changes to the House version. The bill was then sent to Kennedy on October 4 and signed on October 11.[14]
On April 27, 2017,PresidentDonald Trump ordered a review of the aluminum imports and threats tonational security under the Trade Expansion Act of 1962.[15][16][17][18][19] On March 8, 2018, President Trump signed an order to impose thetariffs on steel and aluminum under Section 232 of the act and citing "national security" grounds.[20]
On May 23, 2018, President Trump "instructed Secretary Ross to consider initiating a Section 232 investigation into imports of automobiles, including trucks, and automotive parts to determine their effects on America's national security. Core industries such as automobiles and automotive parts are critical to our strength as a Nation."[21][22][23][Notes 1]
In mid-February 2019,Commerce Department secretaryWilbur Ross delivered a confidential report to President Trump which concluded the Department's investigation under Section 232, that there was a legal rationale for the imposition of steep tariffs on the import of foreign automobiles, as these imports—like steel and aluminum—posed a threat to U.S. national security. According to a March 20, 2019, article inPolitico, the proposed tariffs could be as high as 25%.[24][Notes 2]Politico also reported that as of March 20, the requests by the chair of theSenate Finance Committee—Chuck Grassley (R-Iowa) to access a copy of the confidential report, had been denied.[24] The deadline for Trump's decision on the imposition of the tariffs is in mid-May, ninety days after the report's release.[24]
Early in Trump's second term, he established tariffs on aluminum and steel imports under Section 232. While Trump had imposed other tariffs against all imports from several countries as part of hisLiberation Day tariffs, claiming this power under theInternational Emergency Economic Powers Act, at least two lower courts have ruled these unconstitutional, though theUnited States Supreme Court will hear the caseLearning Resources v. Trump to review these rulings in November 2025. Alongside these challenges, Trump intended to add new tariffs on pharmaceuticals, semitrucks, and kitchen cabinets in September 2025. Section 232 tariffs are expected to be more difficult for courts to review as they typically defer to the executive branch for matters of national security, according toThe New York Times.[25]
