The Biden Administration Flirts with Section 232. It Will Backfire.

Inu Manak andScott LincicomeThe Biden administration ’s newreport on U.S. supply chain “vulnerabilities” contains a lot of bad-but-expected ideas, but it was both surprising and dismaying to see it tacitly endorse arguably the worst trade law on the books.The 250-page report resulted from President Biden ’s February 2021Executive Order calling for an interagency review “to strengthen the resilience of America’s supply chains.” Given the administration’s past statements and the current winds in Washington (blowing towards industrial policy and away from economic openness), the report’s contents – heavy on subsidies, new government programs, and domestic content requirements – were generally unsurprising and will surely be the subject of future work.One issue, however, warrants immediate mention – and scorn: a recommendation that the administration consider using Section 232 of the Trade Expansion Act of 1962, which gives the president broad authority to restrict imports deemed to be a threat to “national security,” to address one specific supply chain concern. The report states:Evaluate whether to initiate a Section 232 investigation on imports of neodymium magnets: Neodymium (NdFeB) permanent magnets play a key role in motors and other devices, and are important to both defense and civilian industrial uses. Yet the U.S. is heavily dependent on imports for this critical product. We recommend that the Department of Commerce evaluate whether to initia...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs