Huh Chang-soo "U.S. Trade Expansion Act Section 232 Causes Tremendous Losses... Supports Amendment" Congressional Letter

[Asia Economy Reporter Kim Hyewon] As discussions on amending Section 232 of the Trade Expansion Act have reignited in the U.S. Congress, the Federation of Korean Industries (FKI) has expressed its welcome and support.

On the 6th, FKI Chairman Huh Chang-soo sent a letter of support to U.S. Senators Rob Portman (Republican) and Dianne Feinstein (Democrat), who jointly introduced the Trade Security Act aimed at amending Section 232 of the Trade Expansion Act.

In the letter, Chairman Huh stated, "The United States and its strong economic allies have witnessed how Section 232 of the Trade Expansion Act has caused tremendous losses to global businesses and consumers," and expressed gratitude, saying, "At this juncture, the efforts of the U.S. Congress to prepare an amendment are very timely."

He continued, "We look forward to the passage of the Trade Security Act, which is expected to establish a more predictable and reasonable process for the application of Section 232," and emphasized, "As a reliable economic partner of the United States, Korea will also contribute to further developing trust between the two countries."

Section 232 of the U.S. Trade Expansion Act served as the legal basis for the import restrictions imposed by former President Donald Trump in 2018 on steel and aluminum imports. It grants the president authority to limit import volumes and impose tariffs if certain imported goods are deemed a threat to U.S. national security. Subsequently, the U.S. Department of Commerce used this provision as a "card" in protectionist trade policies, including considering a 25% tariff on automobiles.

In response, countries subject to tariffs, including Korea, have continuously called for amendments to Section 232. The FKI first requested the U.S. Congress and key administration officials in 2018, when administrative orders under Section 232 were fully implemented, to exclude Korea from steel import sanctions. In 2019, it sent an open letter to the leadership of the U.S. Congress requesting Korea's exclusion from tariffs on imported automobiles and parts under Section 232.

At the 32nd Korea-U.S. Business Council meeting held last November, a joint statement urging the amendment of Section 232 was adopted with the U.S. Chamber of Commerce. In January this year, a congratulatory letter from Chairman Huh to Korean-American members of the 117th U.S. House of Representatives also included a request for congressional attention to the amendment of Section 232.

Kim Bong-man, Director of International Cooperation at FKI, explained, "This letter is a continuation of FKI’s ongoing efforts to convey the Korean business community’s position on Section 232 through channels with the U.S." He added, "Cooperation between the public and private sectors is crucial in international trade issues. With the possibility of amending Section 232 gaining attention under the Biden administration, we hope the Korean government will actively support the realization of this long-standing wish of both countries’ business communities."

The newly introduced Trade Security Act expands congressional authority over decisions and procedures related to the application of Section 232, aiming to check the executive power of the U.S. president under Section 232. According to a press release from Senator Rob Portman’s office, the amendment requires the U.S. Department of Defense, rather than the Department of Commerce, to determine whether certain imported goods pose a national security threat. It also divides the Section 232 application process into two stages: an "investigation" by the Department of Defense and a "trade remedy" phase by the Department of Commerce, thereby splitting responsibilities between agencies. Additionally, it broadly expands the list of items subject to congressional disapproval, which currently applies only to crude oil. The bill was introduced by a total of seven senators, including five Republicans and two Democrats.

The U.S. business community has also welcomed the amendment. On the 23rd of last month, the Association of Equipment Manufacturers issued a statement signed by Chairman Dennis Slater, saying, "Amending Section 232 allows the president and Congress to respond to genuine threats to national security and better aligns with the original intent of the law."

In the letter, Chairman Huh also mentioned investments by Korean companies in the constituencies of the bipartisan senators who introduced the amendment and requested their active interest. In Ohio, the district of Republican Senator Rob Portman, LG Energy Solution and GM have been constructing a joint factory worth 2.7 trillion won since 2019, aiming for operation by 2022. In California, the district of Democratic Senator Dianne Feinstein, Nongshim is reportedly planning to establish its second North American factory with an investment of $200 million (approximately 240 billion won), targeting mass production within this year.

This content was produced with the assistance of AI translation services.