Thursday, February 27, 2020

Memorandum on the Effect of Titanium Sponge Imports on the National Security

MEMORANDUM FOR THE SECRETARY OF DEFENSE
THE SECRETARY OF COMMERCE
THE DIRECTOR OF THE OFFICE OF MANAGEMENT AND
           BUDGET
THE ASSISTANT TO THE PRESIDENT FOR NATIONAL
           SECURITY AFFAIRS
THE ASSISTANT TO THE PRESIDENT FOR ECONOMIC
           POLICY
THE DIRECTOR OF THE OFFICE OF SCIENCE AND
           TECHNOLOGY POLICY

SUBJECT: The Effect of Titanium Sponge Imports on the
National Security

By the authority vested in me as President by the Constitution and the laws of the United States of America, including section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862) (the "Act"), it is hereby ordered as follows:

Section 1. The Secretary of Commerce's Investigation into the Effect of Titanium Sponge Imports on the National Security.

(a) On November 29, 2019, the Secretary of Commerce (Secretary) transmitted to me a report on his investigation into the effect of imports of titanium sponge on the national security of the United States under section 232 of the Act.

(b) The Secretary advised me of his finding that titanium sponge is 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 as defined under section 232 of the Act. The Secretary noted that imports of titanium sponge, which accounted for 68 percent of all titanium sponge consumed in the United States in 2018, threaten to impair the national security by placing the remaining U.S. titanium sponge producer's operation under severe financial stress. The Secretary found that low-priced titanium sponge imports, as well as low-priced titanium scrap imports, depress the price of U.S. titanium sponge and discourage recapitalization and modernization of the remaining active producer's aging production facility. The Secretary concluded that if the remaining facility ceases operation, the United States will have no active domestic capacity to produce titanium sponge for national defense and critical infrastructure needs. The Secretary advised that, absent domestic titanium sponge production capacity, the United States will be completely dependent on imports of titanium sponge and scrap, and will lack the surge capacity required to support defense and critical infrastructure needs in an extended national emergency.

(c) I have also considered the Secretary's finding that 94.4 percent of titanium sponge imports in 2018 were from Japan. The United States has an important security relationship with Japan, including our shared commitment to eliminating the North Korean nuclear threat; our decades-old military alliance; and our strong economic and strategic partnership.

(d) I concur in the Secretary's finding that titanium sponge imports threaten to impair the national security of the United States as defined under section 232 of the Act.

(e) I also agree with the Secretary's recommendation that actions to adjust imports under section 232 not be taken at this time. The Secretary has advised me that measures apart from the adjustment of imports are more likely to be effective to address the threatened impairment of the national security, and such measures are set forth in section 2 of this memorandum.

Sec. 2. Measures to Address the Threatened Impairment of the National Security.

(a) The Secretary of Defense and the Secretary of Commerce are directed to form a working group, along with the heads of other executive departments and agencies as the Secretaries deem appropriate, and invite their counterpart agencies in Japan to participate in discussions with the working group in order to agree upon measures to ensure access to titanium sponge in the United States for use for national defense and critical industries in an emergency.

(b) The Secretary of Defense is directed to take all appropriate action, including using his delegated authorities under the Defense Production Act (50 U.S.C. 4501 et seq.) and seeking new appropriations as necessary, to increase access to titanium sponge for use for national defense and critical industries and to support domestic production capacity for the production of titanium sponge to meet national defense requirements.

(c) The Secretary of Defense and the Secretary of Commerce shall provide periodic updates to me on the progress of these efforts.

Sec. 3. General Provisions. (a) Nothing in this memorandum shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

DONALD J. TRUMP

Thursday, January 23, 2020

Proclamation to Further Facilitate Positive Adjustment to Competition from Imports of Large Residential Washers

TO FURTHER FACILITATE POSITIVE ADJUSTMENT TO COMPETITION FROM IMPORTS OF LARGE RESIDENTIAL WASHERS

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BY THE PRESIDENT OF THE UNITED STATES OF AMERICA

A PROCLAMATION

     1. On January 23, 2018, pursuant to section 203 of the Trade Act of 1974, as amended (the "Trade Act") (19 U.S.C. 2253), I issued Proclamation 9694, which imposed a safeguard measure for a period of 3 years plus 1 day comprising both a tariff-rate quota (TRQ) on imports of large residential washers (washers) provided for in subheadings 8450.11.00 and 8450.20.00 of the Harmonized Tariff Schedule of the United States (HTS) and a TRQ on covered washer parts provided for in subheadings 8450.90.20 and 8450.90.60 of the HTS. I exempted covered imports from Canada and certain designated beneficiary countries under the Generalized System of Preferences from the application of the measure.

     2. On August 7, 2019, the United States International Trade Commission (USITC) issued its report pursuant to section 204(a)(2) of the Trade Act (19 U.S.C. 2254(a)(2)), on the results of its monitoring of developments with respect to the domestic washers industry (USITC, Large Residential Washers: Monitoring Developments in the Domestic Industry, No. TA-204-013). In its report, the USITC found that imports peaked in November and December of 2017, just before the safeguard measure was imposed, and again in February and March of 2019, at the opening of the second TRQ period. More recent data from U.S. Customs and Border Protection indicate that the number of imported units exceeded the 1.2-million-unit annual limit qualifying for the in-quota rate well before the end of the year in the first year of the measure and in less than 3 months in the second year of the measure.

     3. Section 204(b)(1)(B) of the Trade Act (19 U.S.C. 2254(b)(1)(B)) authorizes the President, upon petition of the majority of the representatives of the domestic industry, to reduce, modify, or terminate an action taken under section 203 of the Trade Act when the President determines that the domestic industry has made a positive adjustment to import competition.

     4. After taking into account the information provided in the USITC's report, and after receiving a petition from the representative of the majority of the domestic industry, I have determined that the domestic industry has begun to make positive adjustment to import competition but that, despite that adjustment, increased imports of washers at peak times of the year have impaired the effectiveness of the action I proclaimed in 2018 under section 203 of the Trade Act, and modification of the action is warranted.

     5. Section 204(b)(2) of the Trade Act (19 U.S.C. 2254(b)(2)) also authorizes the President to take such additional action under section 203 of the Trade Act as may be necessary to eliminate any circumvention of any action previously taken under such section. Pursuant to section 203(a)(3)(B) of the Trade Act (19 U.S.C. 2253(a)(3)(B)), the President may proclaim a TRQ on the imported article.

     6. I have further determined that additional action is necessary to eliminate circumvention of the TRQ by ensuring that within-quota quantities of imports of washers are spread throughout the year, thus eliminating the possibility that importers' concentration of imports of washers in a limited period would distort the quantity of washers in the U.S. market and undermine the positive effect of the TRQ on the domestic industry's adjustment to import competition. Accordingly, I have decided to allocate, on a quarterly basis, within-quota quantities of 1.2 million washers during the third year of the action, beginning February 7, 2020.

     7. Section 604 of the Trade Act (19 U.S.C. 2483) authorizes the President to embody in the HTS the substance of the relevant provisions of that Act, and of other acts affecting import treatment, and actions thereunder, including the removal, modification, continuance, or imposition of any rate of duty or other import restriction.

NOW, THEREFORE, I, DONALD J. TRUMP, President of the United States of America, acting under the authority vested in me by the Constitution and the laws of the United States, including but not limited to sections 203, 204, and 604 of the Trade Act, do proclaim that: