Unprotective Protectionism: Reapproaching Section 232 Tariffs

By. Michael Marion

DOI. 10.57912/30813893

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On July 1, 2025, the Department of Commerce initiated a Section 232 investigation into polysilicon (a processed version of the metalloid silicon) and its derivatives. This was an effort to determine whether their import, vital to the manufacture of solar panels and semiconductors, poses a threat to national security. The material’s supply chain has been dominated by low-priced Chinese firms, allegedly engaging in forced labor while benefiting from government incentives. Undeniably, polysilicon is and will remain an essential material in strategic energy technologies. If left to be supplied by a hostile power, it would induce unnecessary risk to the U.S. in the event of conflict. Though this particular application of protectionism may appear justified, it is only one of the many instances of S. 232’s invocation by the Second Trump Administration. On goods ranging from wind turbines to medium- and heavy-duty trucks (MHDVs), such unqualified action under S. 232 has stoked Washington’s trade war with Beijing, damaged relationships with liberal allies, and stands to burden American consumers with unnecessarily higher prices. However, to cast off S. 232 as useless would be a mistake, as the case of polysilicon illustrates. S. 232 is not the problem; its unneeded, limitless application is. Furthermore, if the goal is to stoke domestic industrial growth, the duty-laying tool alone is ineffective and must be accommodated by other types of industrial support. The U.S. should be invoking S. 232 tariffs under explicit time limits and only in innovative, critical sectors that are at an undue disadvantage in the domestic market as a result of foreign industrial policy. With their imposition, a complex system of tax credits and subsidization mechanisms must be enacted by Congress to ensure sectoral maturation.

The Trade Expansion Act of 1962 was passed to promote “a more liberal trade policy,” enlarging a year-on-year balance-of-payments surplus, controlling inflation, and uniting a democratic West against communism. S. 232 was the “‘nuclear option,’” permitting the executive to impede trade flows of an essential good being imported in unacceptable quantities or occurring under unacceptable circumstances. The modern procedures associated with S. 232 involve multiple departments weighing in on the justification for tariffs. Three entities can invoke the provision: the Secretary of Commerce, another department/agency head, or an interested party (ex. corporation), which sets off lengthy proceedings. These involve a Department of Commerce-led research stage, Department of Defense consultation on the situation’s security risk, and a final recommendation to the executive on whether import-limiting action is required. Controversy stems from what constitutes “national security.” There is no set definition, although the Trade Expansion Act lists several considerations, including the production needed for defense, domestic capacity to meet that demand, current and anticipated access to required factors of production, and areas where national economic welfare and security overlap. Pre-Trump 2.0, S. 232 had been invoked 32 times, with Trump overseeing seven 232 investigations in his first term. An additional ten investigations have commenced as of November 20, 2025. The reason for S. 232’s relatively numerous invocations is debated, but it is likely related to the insufficient oversight involved: with an executive order, tariffs come into effect, and from there, Congress can only attempt to pass modifying or overriding legislation.

The first problem with the current use of S. 232 is its over-invocation. S. 232 tariffs have currently been added to all imports of steel and aluminum, automobiles, automobile parts, MHDVs, MHDV parts, and lumber. The recent case of lumber (10% tariff imposed on timber/lumber imports, 25% on cabinets and furniture) is indicative of the provision’s unmerited application, as the importance of cabinets to military function is minimal, while America’s leading import partner in this sector–Canada–is anything but a hostile foreign power. S. 232 investigations, meanwhile, have been launched for commercial aircraft, pharmaceuticals, polysilicon, and several others. Some of these initiatives appear grounded in economic and security rationale. Those on unmanned aircraft systems (UASs) and polysilicon, for instance, are warranted by their importance across a myriad of sectoral contexts and by Chinese supply chain dominance. These productions are critical to future technological and defensive developments and are where American innovation struggles to compete with subsidized foreign industry. Combined with the broad control of their supply chains by subversive powers, these are precisely the industries for which S. 232 was legislated. S. 232 was not intended to enshrine the interests of domestic industrial lobbies in trade policy through an executive tool that has no set end.

It is on that note that the two additional issues with S. 232’s use arise: its indefiniteness and lack of accompanying government incentives to boost domestic production. Once the Commerce recommendation is finalized and the president decides to impose import duties under S. 232, there is no time limit on the validity of those import-hampering measures. Barring a rare congressional interjection, an executive order or declaration is all that can end the duty. This creates a dilemma in which industries that call for tariffs out of a desire to cushion their global uncompetitiveness against more efficient competition can lobby the executive to maintain an artificially high level of domestic market control. No time limit ensures no pressure to make one’s products reach that level of cheapness when success is guaranteed. Altogether, consumers pay more for lower quality products, producers exploit a policy weakness, and S. 232’s security purposes are perverted to serve corporate interests. Innovative, new-age industries like drones and specific renewable energy technologies in their domestic infancy are those that would benefit most from a temporary S. 232 tariff. Even if S. 232 does not demand the addition of a time limit, contemporary presidents can take the step to add one. Unlimited renewal is not justifiable, as it would breed the uncompetitiveness discussed above, but an ostensible expiration date is preferable to a hypothetically infinite mandate.

Furthermore, if the goal is to assist downtrodden yet resilient industries, then shielding them from foreign competition is not the way to spark rapid growth. Subsidies, research partnerships, and other incentives that shift the cost of propping up disadvantaged industries from consumers (in the form of higher prices) to the government must follow any tariff’s imposition. Chinese imports of solar panels harm American producers through their inequitable low cost. Still, if American substitutes are to compete, their production methods will need to improve without facing rapacious competition. This means first cutting off the source of said suppressive market forces, then supporting an industry’s development with funding and conducive policy. The current administration has sparsely employed such measures in its S. 232 invocations, acting regressively in some cases, such as rolling back the Biden-era renewable energy tax credits. If Beijing’s example is to inform Washington, it is that some form of active government-industry partnership is an effective means of accelerating production.

Inextricably, though the new S. 232 technique outlined would do considerably more to support innovative and foreign-suppressed domestic industry, the approach relies on something not overly valued in today’s American trade policy: congressional coordination and approval. An executive order can only define Washington’s moves for so long, breeding unpredictability when sound economic growth depends on stability. The most striking impact of this vision of S. 232 is its lasting legacy in those fiscal measures and bureaucratic reforms. Firms cannot justify a large reallocation of resources in response to a favorable executive order when the next administration may reverse it. It is far more reasonable for businesses to do so when programs are baked into annual budgets, tariffs are logically applied as exceptions in an otherwise liberal trading regime, and there is an end date delineated for duties. National security-minded trade does not have to be repressive in its consumer impacts nor chaotic in its short lifespans. If Washington is to match the threat of China or any other autocratic, illiberal power, then it cannot afford to continue down this reckless, special-interest-catering path.