As the Commerce Department prepares to issue its findings and recommendations in the ongoing Section 232 investigations into the national security implications of steel and aluminum imports, President Trump has signed a new Executive Order calling for a broader review of the state of the U.S. manufacturing and defense industrial base.  The Order, signed on July 21, 2017, links the condition of U.S. manufacturing directly to national security, saying that “{a} healthy manufacturing and defense industrial base and resilient supply chains are essential to the economic strength and national security of the United States.”  The Order calls on several U.S. government agencies, led by the Departments of Defense, Commerce, Labor, Energy, and Homeland Security, to conduct a 270-day assessment of the following five factors and to provide policy recommendations:

  • the military and civilian materiel, raw materials, and other goods that are essential to national security;
  • the manufacturing capabilities essential to producing such goods, including emerging capabilities;
  • the defense, intelligence, homeland, economic, natural, geopolitical, or other contingencies that may  disrupt, strain, compromise, or eliminate the supply chains of such goods;
  • the resiliency and capacity of the manufacturing and defense industrial base and supply chains of the United States to support national security needs upon the occurrence of those contingencies; and
  • the causes of any deficiencies in the defense industrial base or national-security-related supply chains.

The Order does not explicitly call for an assessment of the relationship between these factors and international trade.  According to Peter Navarro, Director of the White House Office of Trade and Manufacturing Policy, this assessment is independent of the ongoing Section 232 investigations.  The substance, however, appears to be closely related to the issues addressed under Section 232, which could foreshadow additional Section 232 investigations and responses covering vulnerabilities identified pursuant to the July 21 Order.

As noted previously on this blog, the relationship between the U.S. industrial base and U.S. national security has been a key element of Peter Navarro’s thinking on international trade issues.  The Trump Administration’s Trade Policy Agenda of March 2017 also included the objective of “{e}nsuring that United States trade policy contributes to the economic strength and manufacturing base necessary to maintain – and improve – our national security.”  As drafted, the July 21 Order does not provide procedures for public comment or participation.