United States Statutes at Large, Volume 133, 116th Congress, 1st Session

[United States Statutes at Large, Volume 133, 116th Congress, 1st Session]
[From the U.S. Government Publishing Office, www.gpo.gov]

 
Proclamation 9888 of May 17, 2019

Adjusting Imports of Automobiles and Automobile Parts Into the United
States

By the President of the United States of America

A Proclamation

1. On February 17, 2019, the Secretary of Commerce (Secretary)
transmitted to me a report on his investigation into the effects of
imports of passenger vehicles (sedans, sport utility vehicles, crossover
utility vehicles, minivans, and cargo vans) and light trucks
(collectively ``automobiles'') and certain automobile parts (engines and
engine parts, transmissions and powertrain parts, and electrical
components) on the national security of the United States under section
232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862).
2. The report found that automotive research and development (R&D) is
critical to national security. The rapid application of commercial
breakthroughs in automobile technology is necessary for the United
States to retain competitive military advantage and meet new defense
requirements. Important innovations are occurring in the areas of engine
and powertrain technology, electrification, lightweighting, advanced
connectivity, and autonomous driving. The United States defense
industrial base depends on the American-owned automotive sector for the
development of technologies that are essential to maintaining our
military superiority.
3. Thus, the Secretary found that American-owned automotive R&D and
manufacturing are vital to national security. Yet, increases in imports
of automobiles and automobile parts, combined with other circumstances,
have over the past three decades given foreign-owned producers a
competitive advantage over American-owned producers.
4. American-owned producers' share of the domestic automobile market has
contracted sharply, declining from 67 percent (10.5 million units
produced and sold in the United States) in 1985 to 22 percent (3.7
million units produced and sold in the United States) in 2017. During
the same time period, the volume of imports nearly doubled, from 4.6
million units to 8.3 million units. In 2017, the United States imported
over 191 billion dollars' worth of automobiles.
5. Furthermore, one circumstance exacerbating the effects of such
imports is that protected foreign markets, like those in the European
Union and Japan, impose significant barriers to automotive imports from
the United States, severely disadvantaging American-owned producers and
preventing them from developing alternative sources of revenue for R&D
in the face of declining domestic sales. American-owned producers' share
of the global automobile market fell from 36 percent in 1995 to just 12
percent in 2017, reducing American-owned producers' ability to fund
necessary R&D.
6. Because ``[d]efense purchases alone are not sufficient to support . .
. R&D in key automotive technologies,'' the Secretary found that
``American-owned automobile and automobile parts manufacturers must have
a robust presence in the U.S. commercial market'' and that American
innovation capacity ``is now at serious risk as imports continue to
displace American-owned production.'' Sales revenue enables

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R&D expenditures that are necessary for long-term automotive
technological superiority, and automotive technological superiority is
essential for the national defense. The lag in R&D expenditures by
American-owned producers is weakening innovation and, accordingly,
threatening to impair our national security.
7. In light of all of these factors, domestic conditions of competition
must be improved by reducing imports. American-owned producers must be
able to increase R&D expenditures to ensure technological leadership
that can meet national defense requirements.
8. The Secretary found and advised me of his opinion that automobiles
and certain automobile parts are being imported into the United States
in such quantities and under such circumstances as to threaten to impair
the national security of the United States. The Secretary found that
these imports are ``weakening our internal economy'' and that ``[t]he
contraction of the American-owned automotive industry, if continued,
will significantly impede the United States' ability to develop
technologically advanced products that are essential to our ability to
maintain technological superiority to meet defense requirements and cost
effective global power projection.''
9. The Secretary therefore concluded that the present quantities and
circumstances of automobile and certain automobile parts imports
threaten to impair the national security as defined in section 232 of
the Trade Expansion Act of 1962, as amended.
10. In reaching this conclusion, the Secretary considered the extent to
which import penetration has displaced American-owned production, the
close relationship between economic welfare and national security, see
19 U.S.C. 1862(d), the expected effect of the recently negotiated United
States-Mexico-Canada Agreement (USMCA), and what would happen should the
United States experience another economic downturn comparable to the
2009 recession.
11. In light of the report's findings, the Secretary recommended actions
to adjust automotive imports so that they will not threaten to impair
the national security. One recommendation was to pursue negotiations to
obtain agreements that address the threatened impairment of national
security. In the Secretary's judgment, successful negotiations could
allow American-owned automobile producers to achieve long-term economic
viability and increase R&D spending to develop cutting-edge technologies
that are critical to the defense industry.
12. I concur in the Secretary's finding that automobiles and certain
automobile parts are being imported into the United States in such
quantities and under such circumstances as to threaten to impair the
national security of the United States, and I have considered his
recommendations.
13. I have also considered the renegotiated United States-Korea
Agreement and the recently signed USMCA, which, when implemented, could
help to address the threatened impairment of national security found by
the Secretary.
14. Section 232 of the Trade Expansion Act of 1962, as amended,
authorizes the President to take action to adjust the imports of an
article and its derivatives that are being imported into the United
States in such quantities or under such circumstances as to threaten to
impair the national security. If that action is the negotiation of an
agreement

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contemplated in 19 U.S.C. 1862(c)(3)(A)(i), and such an agreement is not
entered into within 180 days of the proclamation or is not being carried
out or is ineffective, then the statute authorizes the President to take
other actions he deems necessary to adjust imports and eliminate the
threat that the imported article poses to national security. See 19
U.S.C. 1862(c)(3)(A).
15. I have decided to direct the United States Trade Representative
(Trade Representative) to pursue negotiation of agreements contemplated
in 19 U.S.C. 1862(c)(3)(A)(i) to address the threatened impairment of
the national security with respect to imported automobiles and certain
automobile parts from the European Union, Japan, and any other country
the Trade Representative deems appropriate, and to update me on the
progress of such negotiations within 180 days. Under current
circumstances, this action is necessary and appropriate to remove the
threatened impairment of the national security.
NOW, THEREFORE, I, DONALD J. TRUMP, President of the United States of
America, by the authority vested in me by the Constitution and the laws
of the United States of America, including section 301 of title 3,
United States Code, and section 232 of the Trade Expansion Act of 1962,
as amended, do hereby proclaim as follows:
(1) The Trade Representative, in consultation with the Secretary,
the Secretary of the Treasury, and any other senior executive branch
officials the Trade Representative deems appropriate, shall pursue
negotiation of agreements contemplated in 19 U.S.C. 1862(c)(3)(A)(i) to
address the threatened impairment of the national security with respect
to imported automobiles and certain automobile parts from the European
Union, Japan, and any other country the Trade Representative deems
appropriate.
(2) Within 180 days of the date of this proclamation, the Trade
Representative shall update me on the outcome of the negotiations
directed under clause (1) of this proclamation.
(3) The Secretary shall continue to monitor imports of automobiles
and certain automobile parts and shall, from time to time, in
consultation with any senior executive branch officials the Secretary
deems appropriate, review the status of such imports with respect to the
national security. The Secretary shall inform the President of any
circumstances that in the Secretary's opinion might indicate the need
for further action by the President under section 232 of the Trade
Expansion Act of 1962, as amended.
(4) Any provision of previous proclamations and Executive Orders
that is inconsistent with the actions taken in this proclamation is
superseded to the extent of such inconsistency.
IN WITNESS WHEREOF, I have hereunto set my hand this seventeenth day of
May, in the year of our Lord two thousand nineteen, and of the
Independence of the United States of America the two hundred and forty-
third.
DONALD J. TRUMP