Regulation of Imports and Foregn Investment in the United States on National Security Grounds

Traditionally, concerns over the effects of trade and investment on national security have centered upon the transfer of products and technologies with potential military uses. However, national security concerns also arise with respect to the economic and military impact of imports and of foreign acquisition of domestic assets. The United States has a longstanding statute, section 232 of the Trade Expansion Act of 1962, that allows the President to restrict imports of goods on national security grounds. More recently, another statute, popularly referred to as the Exon-Florio Act, provides the President with authority to bar the acquisition of United States companies or businesses by foreign persons on national security grounds. Thus, United States law provides for the regulation of inward flows of both goods and capital for reasons of national security. This article will examine the substance, interpretation, and application of these laws, and comment upon possible future developments in light of evolving trends in the global economy.