Section 232 of the Trade Expansion Act, 1962

Section 232 is a part of a United States law called the Trade Expansion Act of 1962. It lets the US President put tariffs or limits on imports if the government finds that those imports threaten US national security. In simple words, if the US feels it depends too much on foreign supplies of something important, such as steel or medicines, it can tax those imports to protect and grow its own industry.

Why does it exist?

A country at war or in a crisis needs steel for weapons, chips for defence systems and medicines for its people. If all of these come from abroad, supplies can be cut off. Section 232 was written so the US could protect industries that matter for its defence. Over time, "national security" has been read broadly to include the health of the economy and key supply chains.

Where did it come from?

The Trade Expansion Act was passed in 1962, during the Cold War. For decades, Section 232 was used rarely. It became a major tool in 2018, when the US put a 25% tariff on steel and a 10% tariff on aluminium imports from most countries, effective 23 March 2018. Since then, it has been used for many more products, including cars and car parts, copper, lumber and, in 2026, patented medicines. In June 2025, the steel and aluminium tariffs were raised to 50%.

How does it work?

The process has clear steps:

1. Investigation: The US Department of Commerce (through its Bureau of Industry and Security) starts an investigation, on its own or on request.
2. Report: Within 270 days, the Commerce Secretary sends a report to the President saying whether the imports threaten national security.
3. Decision: If the report finds a threat, the President has 90 days to decide whether to agree and what action to take.
4. Action: The President can impose tariffs, quotas (limits on quantity) or other measures, usually through a proclamation.

Congress does not have to approve each action. This is why Section 232 gives the President wide power over trade.

The 2026 pharma tariff

Commerce began a Section 232 investigation into medicines in April 2025. On 2 April 2026, the President issued a proclamation putting a 100% tariff on patented medicines and their active ingredients. Key features:

• It came into force on 31 July 2026 for some large companies and 29 September 2026 for others.
• Generic medicines, biosimilars and their ingredients are not covered for now. Commerce must advise within a year whether generics should also be brought in.
• Companies that build factories in the US, or reach pricing deals with the US government, can get lower rates.
• Trading partners with trade and security framework agreements can get zero tariffs on listed specialty medicines.

Why Section 232 survived the court ruling

On 20 February 2026, the US Supreme Court held in Learning Resources Inc. v. Trump (6-3) that a different law, the International Emergency Economic Powers Act (IEEPA), does not allow the President to impose tariffs. This struck down the broad "reciprocal" tariffs. But Section 232 tariffs were not affected, because Congress has clearly given the President tariff power under Section 232. So after the ruling, Section 232 became an even more important US trade tool.

India and Section 232

India was hit by the 2018 steel and aluminium tariffs. India filed a WTO complaint (dispute DS547) in 2018 and later raised tariffs on 28 US products in June 2019 in response. In June 2023, India and the US agreed to end six WTO disputes, including DS547. India removed its extra duties on US goods such as chickpeas, lentils, almonds, walnuts and apples. After the US raised steel and aluminium tariffs to 50% in 2025, India again notified the WTO of its right to respond.

Commonly confused concepts

• Section 232 vs Section 301: Section 232 (Trade Expansion Act, 1962) is about national security, and the Commerce Department investigates. Section 301 (Trade Act, 1974) is about unfair trade practices by other countries, and the US Trade Representative (USTR) investigates.
• Section 232 vs IEEPA: IEEPA (1977) is an emergency law about sanctions and blocking assets. The Supreme Court ruled in 2026 that it cannot be used for tariffs. Section 232 clearly allows tariffs.
• Section 232 vs anti-dumping duty: An anti-dumping duty is charged when a foreign company sells a product below its normal price. Section 232 does not need any proof of unfair pricing, only a national-security finding.
• Section 232 vs safeguard duty (Section 201): A safeguard duty protects an industry from a sudden flood of imports. It follows the WTO Safeguards Agreement. Section 232 rests on security, not a flood of imports.

Issues, criticism and the way forward

• Misuse of "security": Critics say calling steel or medicines a security issue stretches the idea too far. They see it as protectionism in disguise.
• WTO conflict: The US defends these tariffs under Article XXI of GATT 1994, the security exception. In 2022, WTO panels in disputes brought by other countries ruled that the 2018 steel and aluminium tariffs did not fit this exception. The US rejected the rulings and appealed, and the WTO Appellate Body cannot hear appeals because it has no members. So the rulings have no effect.
• Higher costs: Tariffs on medicines may raise prices for American patients and insurers.
• Uncertainty for partners: Exporters like India face sudden changes. The way forward for partners is bilateral deals that secure exemptions, while spreading exports across more markets.

Concepts to Know

• Tariff: A tax a country charges on goods coming in from abroad. A 100% tariff doubles the cost of the import.
• Proclamation: An official order issued by the US President.
• Quota: A limit on how much of a product can be imported.
• GATT (General Agreement on Tariffs and Trade): The main set of world trade rules on goods, now part of the WTO system.
• Protectionism: Policies that shield a country's own industries from foreign competition, usually with tariffs or limits.