Is Trump encouraging the world’s use of national security as stealth protectionism?
What a difference an election year makes.
Over the past few years, Senate Republicans have been busy penning legislation to rein in President Trump on national security tariffs, often backed by Democrats. But in the past week, they’ve given up the fight, at least for now. Too long a delay will cost the United States dearly.
Sen. Chuck Grassley (R-Iowa), chair of the powerful Finance Committee, now concedes that his Republican colleagues are divided over how best to limit the president’s use of Section 232, the legislation that allows him do as he pleases on trade under the banner of national security. Grassley says there is no desire among Republicans to oppose Trump heading into November.
The timing couldn’t be worse. Trump just launched his seventh Section 232 investigation, this time claiming that imports of mobile construction cranes imperil U.S. national security. These cranes are imported from Austria, Germany and Japan, but, like in steel and aluminum, and autos, Trump is just as inclined to use Section 232 against allies as adversaries. The legislation is now his go-to means of exceeding U.S. tariff commitments at the World Trade Organization (WTO).
Section 232, which dates to 1962, hadn’t been used before Trump came to office. It gives the president considerable latitude to employ trade measures to shore-up U.S. national security. The idea isn’t new. Adam Smith famously said in “Wealth of Nations” that governments should not turn a blind eye to defense in their pursuit of “opulence.” Even the WTO has a national security “exception” in its agreements covering goods, services and intellectual property.
But, like any exception, ones about national security should be narrowly construed and seldom used. They should also be invoked in “good faith.” This is what Senate Republicans have been focusing on in reforming Section 232. Sen. Rob Portman (R-Ohio), for example, co-sponsored a bipartisan bill to give the Department of Defense a lead role in determining whether there is, in fact, a national security emergency. A bipartisan House bill did the same. But without Senate Republicans leading the way, nothing will get done.
Like Grassley, Portman says that reform isn’t just about stopping Trump. Rather, it’s about consistency and congressional oversight. But reform should be penned with international – not just domestic – concerns in mind. Too many countries are using national security to excuse their trade barriers. If Congress doesn’t reform Section 232, the U.S. will have no credibility in challenging these abuses.
Consider a few recent examples.
First, in a WTO case that will soon make headlines, Qatar argues that Saudi Arabia is stealing its on-line digital content, including European soccer games. Saudi Arabia’s response? National security. How? Saudi Arabia has suggested that because Al Jazeera, based in Doha, is critical of its regime, the Kingdom needs more control over what its citizens see. So Qatar’s intellectual property (IP) is allegedly being stolen to ensure Saudi Arabia’s political stability. U.S. holders of IP should find this account chilling, because countries other than Saudi Arabia could follow suit.
Second, China is stirring controversy with its cybersecurity laws. The U.S., along with seven countries, has queried China at the WTO on its rules on data storage, among other things. Beijing’s response? That’s right, national security. China isn’t unique in this regard. Korea, for example, has long stopped Google from delivering its popular mapping service, given concerns that, if foreign firms handle these data, North Korea might gain access. These measures, shrouded in talk of national security, are hitting U.S. exports of banking services in a variety of countries, and will do real harm to worldwide sales of artificial intelligence in autonomous vehicles, for example.
Third, Egypt caused an uproar when it halted imported motorcycles in 2014. With a single page of legislation, the government instituted a one-year ban of two-wheel bikes and three-wheel “tuk tuks.” Why? You got it, national security.
Politicians and police had been shot by assassins on motorcycles. Other countries, like Colombia, had dealt with similar concerns by prohibiting second riders for short periods. But Egypt went all in, stopping trade in goods that it already subjected to onerous tariffs. U.S. and foreign auto makers could just as easily have been banned using this same logic, and not just in Egypt.
This is the slippery slope. And it’s why Senate Republicans cannot give up the fight over Section 232. National security tariffs on imported construction cranes, like those on steel and aluminum, are a side show. The real risk is that Trump is encouraging the world’s use national security as stealth protectionism. The U.S. must challenge these policies, not lead the way in implementing them.
Marc L. Busch is the Karl F. Landegger Professor of International Business Diplomacy at the Walsh School of Foreign Service, Georgetown University, a nonresident senior fellow at the Atlantic Council and host of the podcast TradeCraft.